Ultra high rates of fuel duty in the UK make diesel forecourt prices by far the highest in Europe despite the fact that the basic commodity price for diesel in the UK is amongst the cheapest.
The Freight Transport Association says that with the seeming inevitability of a $60 barrel price for oil, the UK government's high tax regime is adding unnecessary pain to the UK transport industry.
At 28.9p per litre, the UK's basic diesel price is little different from the rest of Europe - Estonia is 26.6p, France 27.6p, Germany 27.7p and, at the top of the pile, Malta at 32.8p. But the picture changes dramatically following the addition of fuel duty and VAT. At 47.8p per litre, UK fuel duty is by far the highest in Europe - the nearest comparisons are Germany at 32.2p and Italy at 28.2p. When VAT tops off the mix then the UK forecourt price reaches 89p per litre compared with Germany at 69.5p, Italy at 72p and Sweden at 72.1p.
FTA chief economist Simon Chapman said: “It is ironic that whilst we have amongst the cheapest commodity prices in Europe for diesel, the UK tax regime takes our prices almost off the scale when compared to our competitors. Freight transport is a vital factor in our economy and impacts on everything we use or consume. As such, high fuel taxes make a significant contribution to the price of everything we buy. Future tax policy should seek to bring our fuel prices closer to those of our European neighbours.”
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