Budget 2011 – Oil and Gas supplementary charge
The Government have announced that effective 24 March 2011 the supplementary charge levied on profits from U.K. oil and gas production is to be increased from 20% to 32%. The increase in the supplementary charge is intended to help pay for the reductions in fuel duties announced by the Chancellor as part of the Budget measures. The Government’s aim is to strike a balance between oil producers and consumers, and to ensure fairness to taxpayers.
As part of the fair fuel stabiliser, if in future years the oil price falls below a set trigger price on a sustained basis, the Government will reduce the supplementary charge back towards 20% on a staged and affordable basis while prices remain low.
The Government believes that a trigger price of US $75 per barrel would be appropriate, but will set a final level and mechanism after seeking the views of oil and gas companies and motoring groups.