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The Goverments view on Fuel prices

Rev-head Oct 3, 2006

  1. Rev-head

    Rev-head Active Member

    Was bored one night so thought i would e-mail the Goverment on fuel prices this is there response

    Dear Mr Craik

    Thank you for your email of 3 September 2006 to the Treasury about fuel
    prices. I am replying from HM Revenue and Customs, which is the Department
    which deals with the maintenance and development of policy on fuel taxation.

    The current high price of road fuels has been the result of increases in the
    world price of oil, driven largely by strong global demand. The price of
    fuel is fundamentally linked to international oil market conditions, so high
    oil prices are a problem globally, not just in the UK.

    In the UK, a high proportion of the cost of fuel is tax. The policy of
    successive UK governments has been to charge duty on road fuels at rates
    which will not only raise sufficient revenue to fund essential spending
    programmes, but also take account of the environment. Fuel duties play an
    important role in helping the UK meet its Kyoto target for reducing
    greenhouse gas emissions. The Chancellor has therefore resisted calls for
    a substantial cut in fuel duties.

    Tax on fuel in the UK is made up of excise duty and VAT. The current rate
    of excise duty on the main road fuels is 47.1 pence per litre (ppl). VAT is
    charged at 17.5 per cent on the retail cost of the fuel, including the
    excise duty. I am afraid I cannot comment on whether the figures you have
    quoted for extraction, refining and transport of the oil are accurate, as
    these are commercial matters.

    I should add that the recent fuel price increases are not connected to the
    rate of fuel duty in the UK. Fuel duty rates were last increased in October
    2003, and following cuts in rates in 2000 and 2001 to encourage less
    polluting fuels, main duty rates are now lower in cash terms than 1999, and
    16% lower in real terms than in 2000.

    The lower duty rate with a higher pump price has also caused a fall in the
    total tax as a percentage of the price of road fuels. In 2005-06, total tax
    as a percentage of price was 68% for petrol and 66% for diesel, the lowest
    since 1992-93.

    I hope you find this helpful.

    Claire Hardy
    HM Revenue and Customs
    Transport Taxes Team
    100 Parliament Street
    London SW1 2BQ
  2. fallmonk

    fallmonk Turbo Sport

    Well at least you got a answer of them, didnt help much but its a answer none the less!

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