Fuel duty: Green tax or just a tax?

Wednesday 23rd March is the day the next budget is revealed in the UK.  There is wide speculation that the previously outlined increase in fuel duty will be scrapped.  It had been previously announced that both petrol and diesel would be increased by 1p per litre on top of a rise in inflation increase.  That would add about 4-5p per litre in April 2011.  However, we have seen a large increase in fuel since the start of the year and this has been due to the increase in VAT, 1p per litre in duty and rising oil prices.  This had led to a situation where domestic road fuel is at a record all-time high.  This also comes at a time when the country has seen massive financial pressures on a typical family financial situation.

There has been much media attention towards the topic of petrol and diesel prices recently and some programmes have highlighted the difficulties some families are finding with this increased costs.  We have seen stories about people driving less, buying a more fuel-efficient and/or smaller vehicles and really thinking about each mile they are driving.  Which has to be good for the environment.

We all knew that eventually there would be pain at the pumps and we’d have to change our lifestyles and become much less dependent on oil.  But few thought it would be so soon.

Is is right to scrap this increase in duty?

The question on my mind is whether the government should be reducing this pain, which we have been told was put in place for environmental reasons.  These reasons still remain, but just because the financial pressures have started to mount, the original motive for the fuel duty remains.  If we are taxing fuel to either reduce it’s use by artificially making more expensive or to raise funds to find alternatives, maintain roads or just to add money into the general kitty then that is quite a reasonable (if unpopular) .  Is the level of tax and duty right and should market forces, i.e. the oil price now take over?

Whilst I don’t like paying more at the pumps and in order to reduce my fuel usage, I would have to really change my lifestyle and make quite a few changes, that I really wouldn’t want to do.  I can see the bigger picture, as I think most people can.  So really, the sooner we accept the high cost of fuel the better.  My main gripe about the duty is that we don’t seem to be putting the revenue generated to a good cause, like finding an alternative.

So, if the planned duty isn’t added tomorrow, is this a cop out?  I think it probably is, just as we are getting stories about the pain caused by fuel, the wrong message would be sent out.

As usual I would love to hear from you, please use the comments box or drop me an email, mail@energywatersaver.co.uk