Hydrocarbon oil duty

Hydrocarbon oil duty

Hydrocarbon oil duty is the name given to the excise duty levied on oils (mainly road vehicle fuels) in the United Kingdom. It is also commonly known as fuel duty and fuel tax.

The current rates payable for the various types of oil are available online [http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_RatesCodesTools&propertyType=document&id=HMCE_PROD1_024961#downloadopt] .


1909 saw the introduction of petrol duty in the UK, with the rate being set at 3d (£0.013) per UK gallon, bringing the price of a typical UK gallon to 1s 1½d (£0.056).

In 1919, after several years of steady petrol price rises, petrol duty was abolished and replaced by vehicle taxation, and the tax disc based on horsepower. Immediately after the tax was removed petrol was about 4s (£0.20) per UK gallon.

By 1928, after market reductions in the cost of a UK gallon of fuel to about 1s 2½d (£0.06), the Government decided to once again charge duty on fuel, the new rate was 4d (£0.017) per UK gallon - bringing the cost of a UK gallon of petrol to 1s 6¾d (£0.078).

Between 1993 and 1999 the Government's Fuel Price Escalator led to significant rises in the cost of fuel.

In May 2008, UK fuel tax rates were one of the the highest in Europe. The UK tax was £0.55 per litre for diesel and £0.52 for unleaded petrol, where the other countries' rates for diesel ranged from £0.19 per litre in Estonia and Lithuania to £0.37 per litre in Germany, and for petrol from £0.23 per litre in Estonia and Lithuania to £0.54 per litre in the Netherlands.cite news |title=UK drivers pay highest fuel taxes in Europe |author=Robert Winnett |date=2008-05-10 |url=http://www.telegraph.co.uk/news/newstopics/fair_deal_for_drivers/1942640/UK-drivers-pay-highest-fuel-taxes-in-Europe.html |work=The Daily Telegraph |publisher=Telegraph Media Group |accessdate=2008-05-14]

Public transport rebates

The Bus Service Operators Grant provides a fuel duty rebate to local bus service operators. As of 2006 the rebate was 81% for ultra low sulphur Diesel, and 100% for Bioethanol, Biodiesel and Liquefied petroleum gas. [http://www.publications.parliament.uk/pa/cm200607/cmhansrd/cm061212/text/61212w0001.htm#61212w0001.htm_sbhd1] This rebate was previously known as the "Fuel Duty Rebate". Until 1994 the level of the rebate was 100%, [http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmselect/cmtlgr/828/82804.htm] , but by 1999 had been reduced to about 67%. [http://www.parliament.uk/commons/lib/research/rp99/rp99-103.pdf]

Train operators do not receive a general fuel duty rebate, [http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmhansrd/vo011106/text/11106w06.htm#11106w06.html_sbhd10] though in 2006 the duty on biofuels was reduced from 53p to 8p to encourage the its introduction for train use. [http://www.atoc-comms.org/dynamic/atocpress-story.php?atoc=997790]

Aircraft fuel is exempt from fuel duty and value added tax (VAT) due to the Convention on International Civil Aviation, which came into effect in 1947. [http://www.foe.co.uk/resource/press_releases/uk_taxpayers_subsidise_air_10032006.html]

Rates and receipts

From 2007-10-01 the main road fuel (petrol and diesel) duty rate is £0.5035 per litre. [cite web |title=Hydrocarbon Oils: Duty rates |url=http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_RatesCodesTools&propertyType=document&id=HMCE_PROD1_027232 |publisher=UK HMRC] In addition to which VAT is added, at the rate of 17.5%, to the total price of the fuel including the added duty.specify Fuel duty raised £23.3 Billion for the treasury in 2004-5 [cite web |title=Annual Report 2004-2005 tables and statistics |publisher=UK HMRC |url=http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_RatesCodesTools&propertyType=document&id=HMCE_PROD1_025157]

The government is currently considering a transition to Road Pricing, as at least a partial replacement for fuel duties.

ee also

* Fuel duty rebate the rebate that bus operators get.
* Fuel tax for international comparisons.
* Road Pricing
* UK fuel protests


* [http://www.iam.org.uk/NR/rdonlyres/CE2CC386-A41B-42F3-B2F0-8E78B73CB023/0/140605_Petrol_Prices.pdf?knownurl=http%3a%2f%2fwww.iam.org.uk%2fOneStopCMS%2fCore%2fCrawlerResourceServer.aspx%3fresource%3dCE2CC386-A41B-42F3-B2F0-8E78B73CB023%26mode%3dlink%26guid%3db933c0f5594f4da49b9a189de7697250]


External links

* [http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_RatesCodesTools&propertyType=document&id=HMCE_PROD1_026429 Hydrocarbon Oils Duty Rates] UK HM Revenue & Customs website

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