£217m fuel tax hole could mean duty hike in Budget, warns Petrolprices.com
21st April 2009
(Aldershot, UK) Fuel tax revenues have fallen by a staggering £217m per month according to new calculations by PetrolPrices.com, prompting concerns that the chancellor will put fuel tax up again in this week's Budget.
PetrolPrices.com's figures show that the government collected £2502.75m in tax on unleaded and diesel in February 2009, the last month figures are available for.
However, figures for Feb 2008 show fuel tax receipts of around £2720.02m - leaving the government with a £217.27m per month revenue deficit. Revenues peaked last June at £2849.24m
To plug the tax hole fuel duty would have to rise by a further 3.79 pence per litre, pushing the average unleaded pump price back over £1 a litre.
Falling fuel tax revenues are a result of lower pump prices, lower fuel consumption and the reduction of VAT to 15%.
With government borrowing predicted to rise even further in the Budget on Wednesday, and set against a backdrop of what's suspected to be the worst recession since 1945, it's feared the chancellor will be looking to recoup falling fuel tax revenues by raising duty again.
Brendan McLoughlin, founder of PetrolPrices.com said: "If there's any change to fuel tax in the Budget it should be down, not up - we're in a recession and an extra tax is the last thing we need. A recession is a great time to re-evaluate the way we tax fuel and there's arguments to suggest that cutting fuel tax would actually stimulate the economy."
More than 130,000 people have visited PetrolPrices.com/itsyourduty, the web pages of It's Your Duty, PetrolPrices.com's campaign against a fuel tax rise in the Budget. A further 53,000 people went on to visit WriteToThem.com from the campaign pages to write a letter to their MP about fuel tax.
It's Your Duty was launched less than 2 weeks ago The Facebook group for the campaign has more than 9,000 members.
Fuel duty rose by 2 pence per litre in December 2008, and again on April 1 by 1.84 pence per litre - despite Prime Minister Gordon Brown's promise to the nation last July that he wouldn't raise fuel tax for "the full year".
Last month more than 10,000 people left comments on the PetrolPrices.com blog in anger at the fuel duty rise of 2 pence per litre on April 1.
Fuel tax is made up of a fixed duty of 54.19 pence per litre, which is added to the raw cost of the fuel, then a percentage VAT is added on top. VAT is currently 15% following the 'VAT holiday' introduced in December 2008, but is due to return to 17.5% at the end of the year.
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Notes to editors
To view a spreadsheet of fuel tax revenues in the last year please contact
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Louise Doherty
PetrolPrices.com
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