Fuel duty rates

fuel duty uk

Fuel Excise Duty (FED) is 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. The duty rates quoted are for the period 2022/23 as announced in the Spring Statement 2022.

Fuel duty – 2022 to 2023

UK fuel duty is currently 52.95 pence per litre for petrol and diesel. Vehicle fuels with a lower emissions impact 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 30p 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 Spring Statement 2022, the government has cut fuel duty for petrol and diesel by 5 pence per litre across the whole of the UK for 12 months. This measure took effect from 6pm on the 23rd March 2022.

UK Fuel Excise Duty rates – March 2022 to March 2023

Fuel type (used as road fuel) Fuel duty
Ultra-Low Sulphur Petrol 52.95 p/litre
Ultra-Low Sulphur Diesel 52.95 p/litre
Biodiesel 52.95 p/litre
Bioethanol 52.95 p/litre
Liquefied petroleum gas 28.88 p/kg
Natural gas 22.57 p/kg
Electricity 0.0 p/kWh

Source: HM Treasury, March 2022

Fuel duty – Recent history and future trends

For petrol and diesel, fuel duty 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) to 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. 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.

Since Budget 2016, when an expected 1p per litre increase in petrol and diesel fuel duty failed to materialise, fuel duty was absent from Budget announcements, with a further confirmation in 2021 that the fuel duty freeze would continue to at least 2022.

However, in the Spring Statement 2022, the government cut fuel duty for petrol and diesel by 5 pence per litre across the whole of the UK for 12 months. Chancellor Rishi Sunak cited unique global circumstances, including the war in Ukraine, which pushed fuel prices up to unprecedented levels. The Chancellor said the measure's intention was to support motorists.

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Olly Goodall

Author:Olly Goodall
Date Updated:23rd Mar 2021

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