Crude oil prices and petrol pump prices regularly fluctuate, and there has been significant volatility in oil and gas prices over the last few months. The Government does not set the prices paid at the pump, nor wider oil prices. The degree to which petrol pump prices respond to changes in crude oil prices is a commercial matter.
Recognising that fuel is a major cost for households and businesses, the Government announced at the recent Autumn Budget that fuel duty rates would remain frozen at 57.95 pence per litre in 2022-23. As a result of twelve consecutive years of frozen fuel duty rates, the average UK car driver will have saved a cumulative £1,900 by the end of 2022-23, compared to the pre-2010 escalator. This is part of wider targeted action to help with the cost of living. A freeze already represents a cut in real terms and comes at a cost to the Exchequer of almost £8 billion over the next five years. Revenues from fuel duty help to fund essential services, like our schools and the NHS. It is important that we safeguard those revenues for the sake of our first-class public services.
Regarding VAT, this is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services including road fuel. While there are exceptions to the standard rate, these have always been limited by both legal and fiscal considerations.
Whilst the rationale of this petition is appreciated, any reform to the current VAT treatment of road fuel would carry a significant cost to the Exchequer, and this should also be seen in the context of the over £50 billion of requests for reliefs from VAT received since the EU referendum. Such costs would have to be balanced by increased taxes elsewhere, increased borrowing or reductions in Government spending. Given this, there are no current plans to change the current VAT treatment of road fuel.
We thank the Government for responding reasonably quickly however must disagree with some points. The current price of fuel and the predicted continued rise is not a volatile fluctuation as suggested. It is a rise in one direction that at best holds steady for a week but continues to rise at the pump. It does not go down again. To date we are approaching a 35% rise in fuel in just 12 months. A mid-size car covering 12,000 miles per year now uses £600 more of fuel per year.* A truck ( 44GVW) covering 70,000 miles per year uses an extra £15,000 of fuel per year in comparison to 12 months ago.**
The fuel duty levy has not increased since 2011 however the VAT has. Vat has increased to 20% since the 2011 and the amount of vat gathered on the price of fuel today is 35% higher than it was 12 months ago.
The UK public are required to be much greener by 2030 in respect to transport. Electric vehicles will become the only option. With new prices starting at around £25,000 for a small car and very little to choose from in a second hand market the options much of public will have is to give up driving or borrow extensively to continue driving. Travel to and from work and leisure destinations will become limited and public transport will have to be relied which very arguably would not be up to the task.
Fuel protests are already starting to happen which are costly and disruptive. These show peoples frustrations. Our agenda is to focus on the petition along with serious debate in Parliament which we will continue to do if the public support directs us to do so.
In conclusion we believe the Government has the capacity to assist to an extent by reducing duty and vat for a proposed period of time of 2 years. The reduction will help people transition into electric or hybrid vehicles with out feeling they are being punished for purchasing fuel on one end and paying extremely high prices for new electric or Hybrid vehicles on the other. Until this is addressed, unrest will increase amongst the most effected and the amount of effected individuals will grow exponentially.
Fuel Petition UK
*Calculations based on a car covering 12,000 miles per annum, 35mpg fuel@£1.14 per litre & Fuel * £1.50 per litre
**Calculations based on a 44 GVW truck covering 70,000 miles per annum, 8 mpg , fuel @ £1.14 per litre and fuel @ £1.50 per litre
We are extremely proud to have officially reached 100,000 signatures! This milestone now means that our petition will now be considered for debate in Parliament.
We would like to thank everyone who made this possible by signing the petition and sharing with family and friends.
Reaching the 100k mark is not the end of the road for us, we are here to be counted and make sure we are heard. The recent reduction in fuel duty of 5p per litre is not enough, or even visible to the majority of the public.
Please continue to support the petition to bring awareness to the issue and force the government into significant action.