Sage Sunak stands to earn £ 2.9 billion more from motorists due to record prices of petrol and diesel, an RAC analysis suggests.
The chancellor again yesterday rejected calls from MPs to use his spring statement next week to reduce fuel tariffs following the rise in oil prices due to Russia’s aggression in Ukraine.
Other European countries, including France, Germany and Ireland, have either announced plans to temporarily reduce energy tariffs or plan to do so.
An analysis of official statistics shows that the average forecourt price stood at £ 1.63 per liter for petrol and 73 1.73 per liter for diesel, earning the Treasury billions of pounds from additional VAT receipts.
The RAC has compared current petrol prices with recent averages. It found that in 2019 – before driving was reduced due to lockdowns – the Treasury was levying 10 10 billion in VAT on annual fuel sales of 46 billion liters. At that time the average cost of petrol was £ 1.25 per liter and জন্য 1.31 for diesel
RAC calculates that at current prices, motorists are paying at least 7p more VAT per liter of petrol purchased than in 2019.
If prices and demand remain at current levels, it would bring an additional বছরে 2.9 billion a year to the Treasury, which has benefited from price increases since last summer.
Last week, Ireland decided to reduce excise duty by 20 cents on petrol and 15 cents on diesel.
France has announced a 15 cents rebate per liter of fuel for four months from April 1, at an estimated cost of € 2 billion. The rebate will save 9 to fill a € 60 tank.
Sweden and the Netherlands have also cut fuel tariffs, while the German finance minister has proposed a “crisis discount” on fuel tariffs of 20 cents per liter.
These changes will allow British motorists to pay some of the highest price of petrol in Europe.
Jack Berry, head of the red-walled Tory MPs’ Northern Research Group, challenged Sunak to reduce fuel tariffs, saying rising prices had caused “huge VAT losses to the Treasury”.
Sunak said he would remember her advice. “He is right about the rising cost of fuel at the pumps, although I am glad to see the price of Brent over the last few days. [crude oil] The picture is one of instability, which is about 25 percent lower, ”said Sunak.
Giles Watling, a Conservative MP, told the Chancellor: “France is giving a rebate, Germany is lowering a certain price. My right esteemed friend has considered a special reduction, say 15 percent, for essential transportation users such as transportation companies? ‘
Simon Williams, RAC’s energy spokesman, said it was “wrong” that the Treasury would raise about £ 3 billion in VAT this year. He said: “Lastly, when it comes to petrol and diesel, VAT is a tax on a tax because it is levied on 58p-a-liter fuel tariff, which already brings in 27 27 billion a year.
“We strongly urge the Chancellor to take action. . . To help drivers and businesses, be it through a complete reduction in fuel tariffs or some countries have already reduced VAT. “
Retailers have been criticized for increasing their profits in the face of rising fuel costs. Luke Bosdet, from AA, said: “We should see this record price level and start declining this weekend. Otherwise, the MPs who are being tempted by the angry people need to be questioned in Parliament. ”
A Treasury spokesman said: “VAT receipts this year are projected to be 2 billion less than the amount collected directly before the epidemic. To keep costs down, fuel tariffs have been frozen for the 12th year in a row, which will save drivers about 15 15 more each time they fill their tanks than previously planned in 2010. “