Revenue losses from fuel duty could have ‘significant implications’ for UK motorists

Rishi Sunak and host Kay Burley clash over fuel duty

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As part of the Government’s net zero pledge, the sale of new petrol and diesel vehicles will be banned from 2030 with a similar ban for hybrids taking place in 2035. Government analysis has shown there could be three million electric vehicles by 2025, 10 million by 2030 and 25 million by 2035.

This enormous shift in car and driving habits would naturally have a huge benefit for the net zero goals, reducing vehicle emissions massively.

Nevertheless, it would also have a massive impact on Government revenue from fuel duties.

Currently fuel duty accounts for 40 percent of the total cost of a litre of unleaded petrol, around 57.95p.

A further 17 percent comes from VAT at 24.27p per litre of unleaded, with both VAT and fuel duty accounting for roughly the same cost of a litre of diesel.

Neil Isaacson, CEO of Liberty Charge, commented on the future and what needs to be done to address the gap in fuel duty.

Speaking to, he said: “The meteoric rise in the popularity of electric vehicles will continue in 2022, driven by consumer demand, which in turn is being enhanced by a rapidly expanding network of public electric vehicle charge points.

“It is likely that, for the first time ever, in 2022 more EVs and hybrid vehicles will be sold in the UK than petrol and diesel vehicles.

“But the implications for HMRC are significant.

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“There will be a hole in the public finances from the loss of fuel duty that will need to be filled.”

Chancellor of the Exchequer Rishi Sunak announced in the Autumn Budget that a planned rise in fuel duty had been cancelled.

He praised the fact that £8billion would be saved over the next five years.

Many were still critical of the move given the peak in petrol and diesel prices last year, as well as the rising household costs.

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