Fuel Duty Increase Comes Into Effect In UK

by Robin Pilgrim, LawAndTax-News.com, London

02 April 2009

Fuel duties have risen again in the UK, adding a further GBP54 (USD78) to the average annual family fuel bill, the Automobile Association (AA) has warned.

From April 1, fuel duty and Value Added Tax (VAT) on petrol and diesel has risen 2.12 pence per litre.

The AA has estimated that for a family with two petrol cars, each consuming an average of 1,286 litres of fuel per year, the annual tax burden will increase by approximately GBP54.53 (USD78) as a result.

From April 1, 2010, following the return of the VAT rate to 17.5% and an 'inflation + 0.5p' fuel duty rise this time next year, a further 4p a litre is likely to be added to the cost of petrol and diesel.

According to a poll conducted by the AA, four out of five drivers have demonstrated their opposition to the fuel duty increase with half of the sample surveyed urging the Chancellor to freeze fuel duty, and 31% calling for it to be cut completely.

Only 18% can see any justification for a fuel duty rise to support government spending in any shape or form.

According to the Freight Transport Association (FTA), the new measure will also land hauliers with a bill for over GBP900 (USD1,294) per truck, which - on top of the inflation-busting, 9% fee hikes and other discretionary government levies announced on April 1 - will increase the total cost to business by around GBP1,500 (USD2,157) per truck.

The FTA predicts that this could easily lead to significant job losses in the haulage industry.

Speaking of the impact the fuel duty rise will have on consumers, Louise Doherty of PetrolPrices.com stated:

"A fuel tax hike doesn't just hurt drivers, but small businesses, hauliers and everyone who is reliant on them. At a time of soaring unemployment and in the midst of a recession every penny really does count."

Recommended