What is fuel duty and how much is it in the UK?
Chancellor Rachel Reeves is expected to address fuel duty in the upcoming Autumn Budget.
Motorists are concerned that an increase to the tax could be one of the changes the Labour Party have planned for their first Budget in 14 years.
It is an area where the Conservative Party were generous during their time in government, with former Prime Minister Rishi Sunak announcing a 5p cut in 2022.
However, ahead of the Autumn Budget on October 30, fuel duty is expected to rise by up to 7p a litre.
But what is fuel duty and how much is it in the UK?
What is fuel duty?
Fuel duty is a tax charged by the government and is included in the price consumers pay for petrol, diesel and other fuels used in vehicles and for heating.
You also pay standard rate VAT at 20% on most fuel, or the reduced rate of 5% on domestic heating fuel.
The price of fuel is impacted by a number of factors, including the price of crude oil, supply and demand, and fuel duty charged by the government.
How much is fuel duty in the UK?
Fuel duty rates vary based on the kind of fuel. The current rates are as follows:
- Petrol, diesel, biodiesel and bioethanol – 52.95p per litre
- Liquefied petroleum gas (LPG) – 28.88p per kg
- Natural gas – 22.57p per kg
- Fuel oil (burned in a furnace or used for heating) – 9.78p per litre
The tax is worth about £25bn a year to the exchequer, but the Campaign for Better Transport says ending the 5p cut in fuel duty could raise £2.6bn a year.
Meanwhile, a government source quoted in MailOnline said: ‘Ms Reeves’ officials are telling her it’s now or never on fuel duty. The Treasury always hated the fuel duty freeze and is determined to get rid of it.
‘They are advising her that motorists can afford it and that if she doesn’t act to end the freeze now she will find it much harder to do so later in the parliament.’
Follow Metro across our social channels, on Facebook, Twitter and Instagram
Share your views in the comments below