Hydrocarbon Oil Duty

The Finance Act 1910 (the so-called People's Budget) introduced a petrol duty in the UK for the first time. From April 1909 the rate was set at 3d (£0.013) per UK gallon, bringing the price of a typical UK gallon to 1s 1½d (). It was then abolished by the Finance Act 1919 after several years of steady petrol price rises and replaced by vehicle taxation, and the tax disc based on horsepower, after which the cost of petrol was about 4s () per UK gallon. In 1928, following market reductions in the cost of a UK gallon of fuel to about 1s 2½d (), the Government introduced a tax of 4d (£0.017) per UK gallon The escalator was increased in 6p per year in 1997 by Gordon Brown, chancellor for the new Blair ministry. The escalator was effectively cancelled by the Brown ministry follow severe disruption caused by the fuel tax protests in 2000. Since that time more cautious increases have been applied. was later deferred until 1 January 2013 at short notice. The last increase in Fuel duty occurred in 2010. A decrease then occurred in 2022. ==Rates and receipts==

The rates since 23 March 2022 have been as follows: VAT at the current rate is then added to the total price. The taxation percentage of forecourt prices varies according to the price of oil, rising from 55.9% at 65p per litre untaxed to 61.4% at 50p per litre (2012 figures). ==European comparisons==

The UK average petrol price as of April 2025 is £1.37 per litre. As of May 2025, prices in the EU vary greatly from country to country. Denmark pays the most at £1.65 and Bulgaria pays the least at £1.01. Petrol prices in the UK are slightly lower than similar European countries such as France and Germany, with £1.44 and £1.47 per litre respectively. Diesel in the UK costs, on average, £1.40 per litre as of May 2025. This is similar to the most paid across the EU, with Denmark and Ireland paying 1.43 and 1.42 per litre respectively. Diesel in France and Germany costs less on average at £1.31 and £1.32 per litre. The country that pays the least for diesel in the EU is Bulgaria at £1 per litre. There is no VAT charged on avtur for international flights in accordance with the Convention on International Civil Aviation, although commercial operators do pay Air Passenger Duty. Avgas, used by some smaller planes, was taxed at half the rate of road petrol for all users until October 2008, when the reduced rate was limited to commercial flying. A minority of light planes use standard road petrol and pay tax at the normal rate. Buses The Bus Service Operators Grant provides a fuel duty rebate to local bus service operators (but not for express coach which receives no rebate). As of April 2010 the rebate was £0.43 for diesel, £0.2360 for road fuel gas other than natural gas and 100% for biodiesel and bioethanol. Additional rebates are available for increasing fuel efficiency, low carbon emission vehicles and equipping vehicles with Smartcards and GPS tracking equipment. In 2001 it was proposed that long-distance scheduled coach services should receive the rebate in return for offering half-price fares to older and disabled passengers. Construction and farm vehicles Certain registered construction and farm vehicles are allowed to use 'red diesel' which includes a fuel dye and has a significantly reduced tax levy compared to normal road fuel. There are restrictions around the types of vehicle it can be used in and the purposes it can be used for, and there are heavy fines for misuse. Trains Diesel used for passenger trains is zero-rated for VAT. Trains are allowed to use red diesel and rebated biodiesel, as they are included in the category of "Any vehicle designed to be operated on a railway" and in the list of exempted machines. As a result, fuel for passenger services is just taxed at the marked gas oil (red diesel) rate. To incentivise the use of cleaner fuels in trains, the duty was reduced from 53p to 8p for blends of red diesel and biodiesel used in approved pilot schemes in the Budget 2007. ==See also==