Fuel duty rates
Fuel Excise Duty (FED) a UK fuel tax that is added to the price of fuel before it is sold. The duty applies to all hydrocarbon based fuels including petrol, diesel, biodiesel, and liquefied petroleum gas (LPG) that is sold for use by vehicles licensed for road use in the UK.
Fuel duty – 01 April 2012 to 01 Jan 2014Return to top
The duty rates quoted are for the period up to 01 Jan 2014 as announced in Budget 2013.
UK fuel duty is currently 58p per litre for petrol and diesel – see table below. Vehicle fuels with a lower impact on carbon emissions or air quality are taxed at lower duty rates; these include liquefied petroleum gas (LPG), compressed natural gas (CNG) and electricity.
Other than fuel duty, the forecourt price of a litre of fuel also includes the product cost (around 50p per litre), Value Added Tax (in the region of 20-25p per litre depending on price) and the retailers margin (often only 5p per litre or less).
As announced in the Budget 2013, the Government has cancelled the 1.89 ppl fuel duty increase that was planned 01 September 2013, meaning that fuel duty is likely to main unchanged until at least 2014.
|Fuel type||Fuel duty
(from Jan 2011)
(from 23 Mar 2011)
|Fuel duty now
(from 01 Jan 2012)
(from 01 Sept 2013)
|Ultra-Low Sulphur Petrol||59.0 p/litre||58.0 p/litre||58.0 p/litre||58.0 p/litre|
|Ultra-Low Sulphur Diesel||59.0 p/litre||58.0 p/litre||58.0 p/litre||58.0 p/litre|
|Biodiesel used as a road fuel||59.0 p/litre||58.0 p/litre||58.0 p/litre||58.0 p/litre|
|Bioethanol used as a road fuel||59.0 p/litre||58.0 p/litre||58.0 p/litre||58.0 p/litre|
|LPG used as a road fuel||33.0 p/kg||31.6 p/kg||31.6 p/kg||To be confirmed|
|Natural gas used as a road fuel||26.2 p/kg||24.7 p/kg||24.7 p/kg||To be confirmed|
Fuel duty – Proportion of pump price and future trendsReturn to top
For petrol and diesel, fuel duty currently accounts for around 50% of the price at the pump (including VAT which is levied on the duty).
Historically, fuel duty has been used both to raise general government revenues, and also (to a lesser extent) manage the level of car and van use for environmental reasons.
As has been widely covered in the media, UK fuel tax is high by international standards rising steadily over the last 15 years. Between 1993 and 1999 there was a rapid increase with fuel duty increasing by 3% above inflation under the 'Fuel duty escalator’ designed to generate revenues and discourage people from using their cars.
However, due to the economic downturn, a 'Fair fuel duty stabiliser' was introduced in 2011 to control fuel costs by avoiding automatic increases in fuel duty as long as oil prices remain high, with any increase only permitted when, and if, oil prices fall. Revenues lost by the introduction of the stabiliser are balanced by increasing tax on North Sea oil revenues.
As the economic downturn continues, the Chancellor is unlikely to increase fuel duty in the foreseeable future. The recent cancellation of the planned fuel duty increase will mean that fuel duty will have been frozen for nearly three and a half years, the longest duty freeze for over 20 years. For the remainder of the Parliament, any subsequent increases will take effect on 01 September each year, instead of 01 April.