Alistair Darling has increased Fuel Duty by 2p per litre from 1st December, with a further rise of 1.84 p per litre in April 2009 (only 5 and a bit months away) , and more in 2010.
This will to wipe out any saving on fuel from the temporary 2.5% reduction in VAT.
See today's Pre-Budget Report (.pdf)
[...]
Fuel duty7.38 It is the Government's policy that fuel duty rates should rise each year at least in line with inflation as the UK seeks to reduce polluting emissions and fund public services. However, in response to record peaks in fuel prices earlier this year, the Chancellor announced that the 2 pence per litre increase planned for April 2008 would be postponed.
7.39 As a result of falling oil prices, pump prices have now fallen by more than 20 pence
per litre from their July peaks. The Pre-Budget Report therefore announces that the 2 pence per litre increase in fuel duty planned for 2008 will now take place on 1 December 2008. However, as a result of the 2.5 per cent cut in VAT this December, the cost of petrol and diesel will fall for private motorists who should see no increase in the price they pay at the pump this year from this measure.7.40 The Pre-Budget Report also confirms that, as pre-announced in Budget 2008, main
fuel duties will further increase by:
- 1.84 pence per litre on 1 April 2009; and
- 0.5 pence per litre above indexation on 1 April 2010.
7.41 Duty rates for rebated oils will also rise in proportion to main road fuel duties
on these dates. The duty differential for compressed natural gas will be maintained until
2010-11 and the differential for liquefied petroleum gas will decrease by 1 pence per litre on these same dates.
VAT will only be reduced from 17.5% to 15% until the end of 2009.
Will the Chancellor immediately reduce Fuel Duty at the end of 2009 when VAT goes back up ?
Will he immediately reduce the level of Fuel Duty when, not if, the price of crude oil increases again ?
Surely this is a blow to the hard pressed Road Haulage and Farming industries ?
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