Fuel Duty Rates 2012 - 28/03/2012
Who is likely to be affected?
« Click here to go back to the
Businesses producing and importing, and consumers of, hydrocarbon oils and alternative
General description of the measure
Legislation will be introduced in Finance Bill 2011 to amend fuel duty rates.
This measure will ease the burden on motorists at a time of record pump prices.
Background to the measure
• The fuel duty escalator was introduced at Budget 2009 to increase fuel duty by
RPI+1ppl each year until 2014-15.
• This measure was announced at Budget 2011.
The changes will have effect on and after 6pm on 23 March 2011 and on and after
1 January 2012.
Excise duty rates are contained in the Hydrocarbon Oil Duties Act 1979 (HODA): section
6 contains the rates for hydrocarbon oils; section 8 contains the rates for road fuel gases;
section 11 contains rebated rates for heavy oils; section 14 contains the rebated rate for
light oil used as furnace fuel; and section 14A contains the rebated rate for certain
• The Government will abolish the fuel duty escalator and replace it with a fair fuel
• As part of the fair fuel stabiliser, when oil prices are high, fuel duty will increase by
RPI only. However, if the oil price falls below a set trigger price on a sustainable
basis the Government commits itself to increasing fuel duty by RPI plus 1 penny per
litre in each such year. The Government believes that a trigger price of $75 per
barrel would be appropriate, and will set a final trigger price and mechanism after
seeking the views of oil and gas companies and motoring groups.
o The main fuel duty rate will be cut by 1 penny per litre from 18:00 on 23 March
o The main fuel duty rate will increase by 3.02 pence per litre on 1 January
Tax Information and Impact Note 4 April 2011 Tax Information and Impact Note 4 April 2011
o The 2012-13 increase in fuel duty will be implemented on 1 August 2012.
• On 1 August 2012 rebated oils will also rise in proportion to the main rate. The duty
differential for compressed natural gas will be maintained, but the differential for
liquefied petroleum gas will be reduced by the equivalent of 1 penny per litre.
Finance Bill 2011 will amend the relevant sections of HODA.
At 6pm on 23 March 2011 the duty rates for main fuels (that is unleaded petrol and heavy
oil (diesel)), and for biodiesel and bioethanol, will be reduced by 1 ppl.
On 1 January 2012 the duty rates for main fuels (that is unleaded petrol and heavy oil
(diesel)), and for biodiesel and bioethanol, will be increased by 3.02 ppl.
Biodiesel made from waste cooking oil will continue to benefit from a 20ppl duty
differential until 31 March 2012.