Govt collects more from fuel tax than any other EU country

At Fresh Logistics one of the highest costs in fuel. Which on a European basis makes the UK transport industry unfairly disadvantaged when competing for transport contracts due to fuel tax in part.

Pressure groups and watchdogs such as FairFuelUK want the govt. to reduce the rates of fuel duty. This to help with increasing costs, in order to ease the squeeze on consumers’ wallets.

FairFuelUK commented: “With inflation jumping to its highest level in a decade. Also with the geo-political events in the Ukraine driving up oil prices. Thus making energy and fuel bills soar. At FairFuelUK we renew our supporters’ calls for the Treasury to cut Fuel Duty. This should be a matter of top economic priority.

\”By cutting Fuel Duty by at least 3p per litre will bring UK vehicle fuel taxation in line with the EU. Thus allowing UK businesses and logistics to invest in drivers and cleaner transport.\”

Increased costs due to increased fuel tax

The extra fuel costs involved with refrigerated couriers and transporters can be 30% more than standard courier costs. Govt cutting the red diesel rebated rate in April 2022 extra cost pressures are applied – read the blog

Reduced fuel tax

The then chancellor, Rushi Sunak, announced that fuel tax will be cut by 5ppl on 23rd March 2022. This fuel cut will reduce the excise duty on road fuels from 57.95ppl to 52.95ppl. This is the first change in fuel duty since March 2011.

This deduction in fuel tax occurs before VAT is applied. The overall effect of this reduction is 6ppl, with VAT being applied at 20%.

Crude Oil prices hit an eight-year high earlier in March 2022. This saw petrol and diesel prices rise sharply. Crude Oil prices have dropped back to $112 per barrel from $130 in early March.  However, petrol and diesel prices at the pumps remain high, with the average reported prices of £1.56 and £1.68 respectively.

What about the fluctuating wholesale prices?

FairFuelUK is also calling on the government to set up a “pump watch”. To keep watch on oil companies unfairly profiting despite fluctuating prices. Oil pricing increases and decreases all the time. The consumer certainly receives increases, decreases are less commonly carried out or noticed.

For example, in seven weeks 2022, the wholesale price of diesel fell by almost 9%. However, prices at the pumps fell by just 0.5%. It was the same story with petrol over the same period. Wholesale petrol prices fell 11.2%, but only 5.1% of this drop was passed onto drivers.

FairFuelUK said: “Everyone knows what we pay at the pumps does not follow any logic or fairness when oil prices change. For decades the fuel supply chain, notably a few wholesalers have ripped off drivers at will.

“The smaller independent garages are subject to their blackmail too. The prices they are forced to pay, with their wholesalers holding them hostage to their bulk supply. They consciously hold back wholesale price falls amounting to billions. But these greedy faceless businesses will soon be subject to good deal of scrutiny.\”

When will fuel prices come down? How much is the fuel tax cut?

This primarily depends on supply and demand, and the Ukraine. The government has warned that there’s the potential for supply issues to increase prices further before any sign of a reduction.

The government recently made a 5p cut on fuel duty. There is complaint that this reduction has not actually been passed on to the motorist. The forecourts just increase wholesale prices by 5p?

Some campaigners argue that we don’t particularly want fuel prices to come down. This is not the time to make fossil fuels more affordable. The fuel cost reduction is not encouraging people to swap to electric vehicles. Which is a whole other discussion

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