October 28th 2024.
When you pull up to the gas station and fill up your car, do you ever stop to think about what makes up the price you're paying? One of the components included is fuel duty, a tax charged by the government on petrol, diesel, and other vehicle fuels. This tax is set to be a hot topic in the upcoming Autumn Budget, with Chancellor Rachel Reeves expected to address it.
But why are people so concerned about a potential increase in fuel duty? Well, it all goes back to the Labour Party's plans for their first Budget in 14 years. Many motorists fear that an increase in fuel duty could be one of the changes on the horizon. This is in stark contrast to the Conservative Party's previous stance, as they were quite generous with fuel duty during their time in government, even announcing a 5p cut in 2022 by former Prime Minister Rishi Sunak. However, with the Autumn Budget just around the corner, it is expected that fuel duty could rise by up to 7p a litre. But what exactly is fuel duty and how much is it in the UK? Let's dive in and find out.
Fuel duty is essentially a tax that is added to the price of fuel at the pump. It is not a separate charge, but rather included in the overall cost that consumers pay. This tax is not only applicable to vehicle fuels, but also to heating fuels such as natural gas and fuel oil. In addition to fuel duty, consumers also pay a standard rate of VAT (value-added tax) at 20% on most fuels, or a reduced rate of 5% on domestic heating fuel. All of these factors combined contribute to the overall cost of fuel for consumers.
The price of fuel can fluctuate for various reasons, including the cost of crude oil, supply and demand, and fuel duty set by the government. Speaking of fuel duty, it is expected to increase as part of the Labour Party's Autumn Budget. This means that the current rates will likely see an increase, potentially impacting the price at the pump for consumers. So, how much is fuel duty currently in the UK? Well, the rates vary depending on the type of fuel. Here's a breakdown of the current rates:
- Petrol, diesel, biodiesel, and bioethanol: 52.95p per litre
- Liquefied petroleum gas: 28.88p per kg
- Natural gas: 22.57p per kg
- Fuel oil: 9.78p per litre
It's worth noting that fuel duty is a significant source of revenue for the government, bringing in around £25 billion per year. However, there are also opposing views, such as the Campaign for Better Transport, who argue that ending the 5p cut in fuel duty could raise an additional £2.6 billion per year. This brings us back to the upcoming Autumn Budget and the potential changes that could be made. According to a government source, officials are urging Ms. Reeves to take action on fuel duty, claiming that motorists can afford it and that it will be harder to do so later on in the Parliament if action is not taken now.
What are your thoughts on fuel duty? Do you think it should be increased or decreased? Share your views in the comments below.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
[Generative AI is experimental.]
