No: CE 17 28 November 1995 BUDGET 1995: EXCISE CHANGES IN FUEL DUTIES The Chancellor announced that from 6pm tonight tax on leaded, unleaded and superunleaded petrol, and diesel, will go up by 3.5p per litre (15.9p per gallon) including VAT. From the same time the duty on road fuel gas(Compressed Natural Gas and Liquid Petroleum Gas) is being reduced by 5.8p per kilogram including VAT and the duties on gas oil and fuel oil are being increased by 0.19p and 0.15p per litre (0.9p and 0.7p per gallon) excluding VAT. The tax on superunleaded petrol will go up by a further 3.9p per litre (17.7p per gallon) including VAT from 15 May 1996. The Chancellor's decisions reflect a number of factors including his commitment in the November 1993 Budget to raise road fuel duties on average by at least 5 per cent in real terms in future Budgets in order to encourage further reductions in UK carbon dioxide emissions. Superunleaded petrol is being taxed at a higher rate to protect the yield from mineral oils following its more widespread use as a substitute for leaded petrol, and to reflect concern about increased emissions of aromatics such as benzene. The duty on road fuel gases is being reduced because they produce markedly fewer emissions of important pollutants. NOTES FOR EDITORS 1. The duty rates from 6pm on 28 November 1995 are as follows: Old rate(p) New rate(p) Increase of(p) per cent Light oils per litre 36.14 39.12 3.5 inc. VAT 8.2 (except AVGAS) per gallon 164.30 177.84 15.9 inc.VAT 8.2 Unleaded and per litre 31.32 34.30 3.5 inc.VAT 9.5 superunleaded per gallon 142.38 155.93 15.9 inc.VAT 9.5 petrol Diesel per litre 31.32 34.30 3.5 inc.VAT 9.5 per gallon 142.38 155.93 15.9 inc.VAT 9.5 Gas oil per litre 2.14 2.33 0.19 exc.VAT 8.9 per gallon 9.73 10.59 0.86 exc.VAT 8.9 Fuel oil per litre 1.66 1.81 0.15 exc.VAT 8.9 per gallon 7.55 8.23 0.68 exc.VAT 8.9 AVGAS per litre 18.07 19.56 1.75 inc VAT 8.2 per gallon 82.15 88.92 7.96 inc VAT 8.2 Old rate (p) New rate(p) Decrease of(p) per cent Road fuel gas per kg 33.14 28.17 5.8 inc. VAT - 15 (The rates per litre and per kilogram are those actually specified in legislation). 2. From 15 May 1996, the duty rate for superunleaded petrol will be 37.62p per litre (171.02p per gallon), excluding VAT. 3. A commitment to future real duty increases in road fuels of at least 3 per cent a year was given by the previous Chancellor in the March 1993 Budget. The present Chancellor raised this to 5 per cent in the November 1993 Budget following the consultation launched by the Secretary of State for the Environment, which suggested that further measures should be taken to restrain CO2 emissions in the transport sector. 4. The duty on road fuel gases was frozen in the November 1994 Budget pending further work on their environmental benefits. This work has confirmed that road fuel gases offer reductions in emissions of nearly all pollutants. However, the gases are more expensive than petrol or diesel to produce. The 15 per cent reduction in duty should equalise the costs of using gases with those of petrol/diesel. It will then be up to consumers to choose whether to convert or purchase vehicles to run on these fuels, without a disincentive from the price of the fuels. (See also Treasury Press Release). 5. The estimated net revenue yield from these changes is 80 million Pounds in 1996-97 on an indexed and non-indexed base. The existing commitment to 5 per cent real increases in duties on petrol and diesel (already announced, and therefore not scored as additional revenue) raises 1070 million Pounds on an indexed base and 1695 million Pounds on a non-indexed base. The RPI impact of the Budget changes is estimated to be + 0.24 per cent (non-indexed) and + 0.02 per cent (indexed). 6. Details for traders are available in Budget notice BN 45/95. ISSUED BY: HM CUSTOMS AND EXCISE, PRESS AND INFORMATION OFFICE, NEW KING'S BEAM HOUSE, 22 UPPER GROUND, LONDON, SE1 9PJ TELEPHONE: 0171 865 5468/5470/5471 FAX: 0171 865 5625/5667