Increase On Fuel Duty Postponed, Darling Announces

by Robert Lee, Tax-News.com, London

16 July 2008

The UK's Chancellor of the Exchequer, Alistair Darling announced on Wednesday that he is postponing the 2 pence per litre increase in fuel duty that was expected to take place on 1st October, 2008.

As a result of this decision, main road fuel duty rates will remain at 50.35 pence per litre after 1st October this year.

This is 17% lower in real terms than in 1999.

Consequently, planned increases in road fuel gases, biofuel duty rates and rebated oils rates will also be postponed.

Mr Darling commented:

"The global credit crunch and sharp rises in world oil prices have pushed up prices at the pump. Today's decision will help motorists and businesses get through what is a difficult time for everyone."

According to the Treasury, this measure is being taken in response to sharp rises in world commodity prices, with the price of oil almost doubling over the past year to reach a real-terms record high of USD146 a barrel recently.

This has inevitably had a significant knock-on effects on the price of road fuels, which the Government is committed to taking into account when considering decisions on fuel duties.

The Treasury says that postponing the planned increase in fuel duty is also consistent with the Government's commitment to support the Bank of England in maintaining low inflation.

However, future rate decisions are a matter for the Budget, the Treasury has stated.

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