Fuel duty up another 2p as tax revenues down
22nd April 2009
(Aldershot, UK) The chancellor Alistair Darling has confirmed that fuel duty will go up for a second time this year, to compensate for lower pump prices and a bigger drop in fuel consumption than expected.
Presenting the Budget 2009 Mr Darling said that fuel duty would rise by a further 2 pence per litre in September 2009, and then by 1p a litre above indexation each April for the next four years.
The full Budget report states:
"Fuel duties in 2008-09 were £0.4 billion below their 2008 Pre-Budget Report projection and were lower than in 2007-08. Since fuel duty is charged on a per litre basis, this reflects a reduction in the demand for fuel."
The newly announced duty rises are in addition to the 1.84 pence per litre rise that came into force on April 1, and on top of the 2 pence per litre duty rise last December.
September's increase will bring the total duty on a litre of fuel to 56.19 pence per litre. The 'VAT holiday' is to last until the end of the year, so with 15% VAT on top this will take the total tax on a litre of fuel to around 68 pence - or 70% of the average cost.
A driver spending £25 a week on fuel spends around £1,300 a year at the pumps - £882.93 of which is tax. Another 2p rise would bring the average driver's total spend on fuel tax to £911.76 a year.
Along with tax hikes on alcohol and cigarettes, the government hopes the fuel duty hike will bring in the Treasury an extra £6 billion.
The chancellor appears to have ignored the pleas of motorists, not to mention the countless letters sent to MPs asking for fuel tax to be frozen.
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.
Brendan McLoughlin, founder of PetrolPrices.com said: "A drop in fuel consumption is yet another indicator of how poorly the economy is doing - the chancellor should have used the Budget to announce fuel duty cuts which would be a great way stimulate it."
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