How much does the government get from duty on fuel?

Answer 1

You'll get a better answer than this but b****y billions!! i think it's something like 26 million cars on our roads?? i personally put £52.00 in every 6 working days!! if your average car owner put's just £10.00 per week in add that b****y lot up! coz the m,ain percentage of fuel prices are Tax!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Answer 2

When fuel duty and V.A.T. are added together, the Government takes over 80% out of the price of a gallon of fuel.

The petrol station gets around 15% and the remainder goes to pay for transportation.

Answer 3

It depends on the state, as there are both fedarl and state taxes on fuel. Last I heard we were approaching 50 cents a gallon in Michigan total, but I'm not sure of the fed and state tax rates.

Answer 4

In the UK it's approximately 50% of the retail price.

Ian M

Answer 5

Ni on all of it the greedy tossers!! (70%)

Answer 6

63.7 p per litre. 81.5% of the pump price.

Answer 7

To effin much!

Answer 8

not sure

Answer 9

Most oils, including road fuels, are subject to excise duties. The system of duties is administered by HM Customs and Excise, and revenues are collected from manufacturers and importers of liable oil products. This means that none of the price paid by the motorist at the petrol pump goes directly to the state. Rather, it reflects the price charged by the manufacturer or importer to the distributor or retailer, which is passed on in turn to the consumer.

Different types of oil products are subject to different rates of duty, with road fuels generally being taxed much more heavily than other oils. The majority of oils are liable on a per litre basis.

Ultra-low sulphur petrol and diesel are liable for duty of 47.10p per litre, while the rate for non-ULS unleaded petrol is 50.19p and 53.27p for non-ULS diesel. Biodiesel used as a road fuel is liable for duty of 27.10p per litre, while road fuel gases such as liquefied petroleum gas (LPG), and compressed natural gas are liable for duty of 9p per kilogramme.

The rates of road fuel duties are adjusted annually by the Chancellor of the Exchequer as part of the Budget, with changes coming into force that day under the terms of the Provisional Collection of Taxes Act 1968.

Road fuels are also liable for Value Added Tax at a rate of 17.5 per cent of the full retail price (including duty), while vehicle ownership is taxed through Vehicle Excise Duty.

It is a legal requirement to run road vehicles on duty-paid fuels. Failure to do so can result in a fine of up to £250 plus the evaded duty, along with the risk of forfeiture of the vehicle. Registered non-DVLA registered vehicles, which includes tractors and some other agricultural vehicles, are permitted to use rebated heavy fuel oils or gas oil, the latter known as "red diesel" because of the dye that is added to it in order to prevent it from being used in ineligible vehicles.

Fuel duties in the UK are high by international standards, as a means of raising revenue and in order to discourage pollution. This has led in recent years to widespread dissatisfaction, which reached a peak in the summer of 2000.

Background

Petrol duty was first introduced in 1909, at a rate of 3d per gallon under the Finance Act 1908. By 1915, this had doubled to 6d, albeit with a 50 per cent rebate for commercial vehicles. However, it was abolished under the Finance Act 1919, which also introduced the tax disc and the taxation of vehicles according to their horsepower rating (the "Treasury Rating").

The price of fuel dropped dramatically in the following years, and the Government felt confident enough to reintroduce petrol duty at a rate of 4d per gallon in 1928.

The current state of affairs with regard to road fuel duties has its origins in Norman Lamont's Budget of 1993. In this, the then Chancellor increased duties by 10 per cent and announced the "fuel duty escalator", under which they would increase annually by 3 per cent above inflation. The oil industry tolerated this, because at the same time the Chancellor reduced Petroleum Revenue Tax from 75 per cent to 50 per cent, and abolished it altogether for new fields developed after 1993. Indeed, the immediate effect of the Budget was a 6.4 per cent surge in BP's share price. In 1990, a litre of petrol had cost 41p - by 1995, this had risen to 59p.

In November that year, the new Chancellor Kenneth Clarke announced that the escalator would be 5 per cent above inflation per year. This situation persisted until July 1997, when the new Labour Chancellor Gordon Brown increased the escalator rate to 6 per cent above inflation. By 2000, the average price of petrol was 82p per litre.

Public discontent at the price of fuel had been growing for months, particularly amongst farmers and road hauliers. Following protests in France, in September, discontent broke out into a series of go-slow protests through towns and on major roads, and blockades of oil refineries. The protests, led by the group Farmers For Action, won considerable public support, and brought some parts of the country to a virtual standstill within days. The Government, however, refused to give in to the demands to reduce fuel duties.

However, the Pre Budget Report of November that year promised reductions in duty for ultra-low sulphur petrol and conventional unleaded petrol of 2p per litre, and a freeze on duty until 2002. This, along with a series of reforms to Vehicle Excise Duty, were implemented in the 2001 Budget.

Threats of new protests arose intermittently throughout the following years, but nothing of the scale of September 2000 coalesced. By October 2003, the Government was willing to begin increasing fuel duties in line with inflation once again - although increases announced in the 2004 Budget were deferred from their intended September 1 start date until later in the year.

Controversies

The price of road fuel is one of the most divisive political issues in the country, with campaigners demanding both higher and lower duties.

Environmental groups insist that the levels of duty charged by the Government fall short of meeting the true environmental costs of motoring. They point to the rising numbers of short private car journeys and call for higher duties in order to discourage "unnecessary" vehicle use. While the Fuel Duty Escalator was introduced with an explicit environmental purpose, critics complained that it was too much of a compromise.

Similarly, it is argued that although the price of fuel has risen in absolute terms, it is falling in real terms. In August 2004, the House of Commons Environmental Audit Select Committee claimed that petrol was 10 per cent cheaper in real terms than in 2000, and that the revenue from environmental taxes were at their lowest since 1993.

Opponents of the fuel duty regime reject this approach as ignoring a number of important factors. People living in rural areas, it is argued, cannot be driven onto public transport by high duties in the way that the environmental lobby demands, because the facilities are inadequate. It is widely argued that a car is a necessity for rural people, not a luxury.

More widely, it is frequently argued that public transport everywhere is not good enough to encourage people out of their cars, and that as such, higher duties result in nothing more than financial penalties for drivers. The state of the transport infrastructure, and the levels of taxation extracted from motorists in general, are a widespread cause of resentment amongst the general public.

It is also pointed out that fuel prices are much higher in the UK than in much of the rest of Europe. This has produced a duty evasion problem, although this is largely confined to international road haulage.

The Government's response to these pressures has paralleled that taken in relation to Vehicle Excise Duty. It has sought to incentivise the use of more environmentally-friendly fuels by providing discounts. However, this too has been criticised: it is argued that the discounts are too small to encourage the wider distribution of these fuels, and that as such, the benefits will not be widely felt. The 2003 Pre Budget Report, moreover, saw duty for Liquid Petroleum Gas increase. The Government argued that this was justified after years of preferential treatment for the alternative fuel, but the industry complained that the conflicting signals sent out by the reversal of policy confused motorists and investors, considerably harming the potential of LPG to enter the mainstream.

Statistics


Fuel duties collected by Customs in 2002-2003 amounted to £22.1 billion, and they are predicted to amount to £22.8 billion in 2003-2004 and £24.4 billion in 2004-2005.

That amounts to 20.33 per cent, 19.59 per cent and 20.07 per cent of HM Customs' total revenues for those years.

Statistics 1 and 2: (Source: HM Treasury, "Budget Report 2004")

Quotes

"Yes, petrol is expensive. But of the 14p rise since the Budget last year, 12 pence has been in the world oil price. Which is why these protests have taken place all over the world. It's true that it's cheaper elsewhere in Europe. But VAT is often higher there. Income tax is higher. Business taxes are higher. There are road tolls and higher national insurance charges. I am listening to people's anger over fuel duties. For hauliers and farmers to say nothing of ordinary motorists, there is real hardship. But I have also had to listen over under-funding in the NHS. Over extra investment in schools. Over more police on the beat. Over public transport."


Tony Blair MP, Labour Conference Speech, September 2000

"The only thing that the People's Fuel Lobby is willing to accept is a cut in fuel tax right across the board for every single person in this country. That is what it's got to be."