Budget 2011 – Fuel Duty rates
The Chancellor has announced a number of measures to help reduce fuel duty to help motorists suffering from soaring fuel prices. The Chancellor acknowledged that the rising price of fuel places a huge burden on families and businesses. He acknowledged that he was under considerable pressure from consumer and business groups to relieve the pain of high fuel prices. Whilst the price of oil continues to increase, the Government has introduced a number of new measures to reduce the amount of fuel duty.
The Chancellor quipped that ministers cannot control the price of world oil prices but said ‘British Governments are in charge of the duty we levy on petrol. We’ve done what we can to help.’
The new measures are as follows:
- The main fuel duty rate has been cut by 1p per litre from 18:00 on 23 March 2011.
- The planned inflation-linked increase of 3.02p per litre in fuel duty, scheduled for 1st April, is to be delayed until 1 January 2012.
- The 2012-13 increase in fuel duty will be delayed until 1 August 2012 (from April 2012).
The Chancellor also announced that the fuel duty escalator, introduced by the last Labour Government is to be cancelled for the rest of the current Parliament (until 2015). The ‘escalator’ automatically added an additional 1p to fuel duty over inflation.
In place of the ‘escalator’, the Government is to introduce a ‘fair fuel stabiliser’ under which 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 and deferrals in fuel duties announced by the Chancellor.