Fuel Duty rates 2022-23
Published 23 March 2022
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This publication is available at https://www.gov.uk/government/publications/changes-to-fuel-duty-rates/fuel-duty-rates-2022-23
Who is likely to be affected
Manufacturers, importers, distributors, retailers and household and business consumers of petrol, diesel and other fuel products subject to Fuel Duty.
General description of the measure
This measure reduces rates of Fuel Duty for 12 months. This includes cutting rates for diesel and unleaded and leaded petrol by 5 pence per litre (ppl), with a proportionate percentage cut (equivalent to 5ppl from the main Fuel Duty rate of 57.95ppl) in other lower rates and the rates for rebated fuels, where practical. The rate for Avgas will be reduced by 5%.
The current and revised rates of Fuel Duty are shown in the following table:
| *Current rates | *Rates from 23 March 2022 | |
|---|---|---|
| Light oils | ||
| Unleaded petrol | 0.5795 | 0.5295 |
| Light oil (other than unleaded petrol or aviation gasoline) | 0.6767 | 0.6267 |
| Aviation gasoline (Avgas) | 0.3820 | 0.3629 |
| Light oil delivered to an approved person for use as furnace fuel | 0.1070 | 0.0978 |
| Heavy oils | ||
| Heavy oil (diesel) | 0.5795 | 0.5295 |
| Marked gas oil | 0.1114 | 0.1018 |
| Fuel oil | 0.1070 | 0.0978 |
| Heavy oil other than fuel oil, gas oil or kerosene used as fuel | 0.1070 | 0.0978 |
| Kerosene to be used as fuel in an engine, other than in a road vehicle or for heating | 0.1114 | 0.1018 |
| Biofuels | ||
| Bioethanol | 0.5795 | 0.5295 |
| Biodiesel | 0.5795 | 0.5295 |
| Biodiesel for non road use | 0.1114 | 0.1018 |
| Biodiesel blended with gas oil not for road fuel use | 0.1114 | 0.1018 |
| Road fuel gases | ||
| Liquefied petroleum gas (LPG) | 0.3161 £/kg | 0.2888 £/kg |
| Road fuel natural gas including biogas | 0.2470 £/kg | 0.2257 £/kg |
| Other fuel | ||
| Aqua-methanol | 0.0790 | 0.0722 |
*pound per litre unless stated otherwise.
Policy objective
This measure is intended to reduce the cost of fuel to support households and businesses at a time of very high oil prices.
Background to the measure
Fuel Duty is payable on petrol, diesel and other fuels used in vehicles, for heating and other uses, such as non-road mobile machinery (this excludes gas, electricity and solid fuels such as coal which are subject instead to climate change levy).
At Spring Statement 2022, the government announced that rates of Fuel Duty will be temporarily reduced for 12 months. This includes cutting rates for diesel and unleaded and leaded petrol by 5 pence per litre (ppl), with a proportionate percentage cut (equivalent to 5ppl from the main Fuel Duty rate of 57.95ppl) in other lower rates and the rates for rebated fuels, where practical. The rate for Avgas will be reduced by 5%.
Detailed proposal
Operative date
The change will have effect for 12 months from 6pm on 23 March 2022.
Current law
Fuel Duty legislation is contained in the Hydrocarbon Oil Duties Act 1979 (HODA). The rates are set out in sections 6-8 and relevant rebates on those rates for certain fuels are set out in sections 11, 13AA, 13ZA, 14, 14A and 14B.
Proposed revisions
Secondary legislation will be introduced to adjust the liability to duties in sections 6 - 8 and the rebates in sections 11, 13AA, 13ZA, 14,14A and 14B of HODA.
Summary of impacts
Exchequer impact (£m)
| 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|
| -45 | -2385 | 0 | 0 | 0 | 0 |
Economic impact
This measure is expected to reduce transport costs for households and businesses, relative to Fuel Duty rates remaining unchanged. The measure will have a direct effect on CPI and RPI and is expected to reduce the price index level of CPI and RPI marginally, by around 0.1ppts in 2022-23 if it is fully passed on. This effect on the price level will then unwind in 2023 to 2024, as duty is uprated again from its previous level of 57.95p in 2021 to 2022. The measure will support household disposable incomes and therefore spending in the economy.
Impact on individuals, households and families
This measure has potential to impact up to an estimated 36 million individuals by reducing motoring costs, subject to how much they drive, relative to Fuel Duty rates remaining unchanged. This measure is not expected to have an impact on family formation, stability or breakdown.
Customer experience is expected to remain broadly the same, as the change in the Fuel Duty rates does not change any processes or tax administration obligations for individuals.
Equalities impacts
This measure will benefit those that consume more fuel, which is likely to include those that rely on private transport for mobility. This includes, but is not limited to, those with disabilities. It is not anticipated that there will be impacts for those in other groups sharing protected characteristics.
Impact on business including civil society organisations
This change will benefit businesses where fuel is part of ongoing running costs.
The measure is expected to have a negligible administrative impact on businesses using fuel types subject to Fuel Duty. One-off costs will include familiarisation with the new rates and updating their systems. There are not expected to be any continuing costs.
Customer experience is expected to remain broadly the same as the change does not affect how businesses interact with HMRC.
This measure is not expected to impact civil society organisations.
Operational impact (£m) (HMRC or other)
HMRC will incur a negligible cost for changing the Fuel Duty rates.
Other impacts
This measure is being brought forward in recognition of the unique circumstances pushing up fuel prices to unprecedented levels – which will likely reduce any marginal impact of carbon emissions from marginally increased consumption of fossil fuels that this measure may cause.
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be monitored through information collected from tax receipts. Continued collaboration with the Department for Transport will also allow monitoring of traffic levels and emissions.
Further advice
If you have any questions about this change, please Andy Wiggins at andy.wiggins@hmrc.gov.uk
Declaration
Rishi Sunak MP, Chancellor of the Exchequer, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.