Excise duty - road fuel and other oils
The measure
Excise duty on the main road fuels, unleaded petrol and diesel were increased by 1.84p per litre on 1 April 2009 to 54.19p per litre. This represents an increase of above 3.5%. These duties will be increased further on 1 September 2009 by 2p per litre to 56.19p per litre and on 1 April 2010 to 2013 by 1% above inflation each year.
The same increase of 1.84p per litre will also be applied to leaded petrol and will take effect on 1 May 2009 increasing the rate to 63.91p per litre. This rate will be further increased by 2p per litre on 1 September 2009 to 65.91p per litre.
On 1 April 2009 the excise duty on biodiesel and bioethanol was also increased by 1.84p per litre, to 34.19p per litre. These rates will be further increased by 2p per litre to 36.19p per litre on 1 September 2009 to maintain the current 20p per litre differential with unleaded petrol and diesel. However this differential will cease from 2010 when excise duty will be charged in line with the same rate as the main road fuels.
On 1 April 2009 the excise duty rate for road fuel natural gas was increased to 19.26p per kg to maintain the differential with main road fuels in pence per litre equivalents and the excise duty rate for road fuel liquefied petroleum gas ('LPG') was increased to 24.82p per kg to reduce the differential with main road fuels by the equivalent of a penny on a litre of petrol. These rates will be increased further on 1 September 2009 to 22.16p and 27.67p per kg to maintain their differential with the main road fuels. From 2010 to 2013, the duty differential for natural gas road fuel will be maintained and the duty differential for LPG will be reduced by the equivalent of a penny on a litre of petrol each year.
The rate of excise duty applicable to aviation gasoline ('Avgas') used for domestic flights will be increased by 2.31p per litre on 1 May 2009. This rate will be increased further by the same percentage as the rates for main road fuels on 1 September 2009.
The effective rates of excise duty for non - road fuels was increased on 1 April 2009 by the same percentage as the main road fuels. These rates will be similarly increased on 1 September 2009 and on 1 April 2010 to 2013.
Who will be affected?
A wide range of businesses and consumers will be affected.
When?
The dates when the new rates of excise duty are to be affected are included in the details of the measures above.
The increases in road fuel excise duties are likely to hit motorists hard in the current economic climate and the road transport industry has indicated that it will be hit especially hard. The increases on non - road fuels should not, in many instances, directly effect the excise duty on oil used to generate electricity for homes as this can be relieved. The increase to the rate for Avgas will also impact on domestic flights and increase the cost of travel.
