Historic Fuel Prices
Fuel prices have increased exponentially over the past quarter of a century. In 1989, the average cost of unleaded petrol was 38.5p per litre and diesel cost 36.1p per litre. In May 2013, however, motorists were paying 134.2p for a litre of unleaded and 138.9p for a litre of diesel – a whopping increase of 264% in just two and a half decades.
In 1989, the fuel duty on unleaded petrol was 17.7p per litre and 17.3p per litre on diesel and the revenue from road fuel duties in 1988/89 was £8.7bn. Today, the total cost of fuel duty has soared by over 240% to 57.95p per litre for both petrol and diesel, netting the Treasury £26.8bn in 2011/12.
But drivers are dealt a double tax whammy as they are taxed twice at the pump – first with fuel duty and then with VAT, which is now charged at the standard rate of 20%, having increased from 15% in 1989. While fuel duty has been frozen until at least September 2014, if fuel prices increase, the price paid in VAT will rise accordingly. So, for example, if you fill up with £50 worth of petrol you will be paying X in duty and £8.33 in VAT*.
* Correct as of June 2013