Huffington Post
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Fuel Price Could Rise By 50%, Warns RAC
PA | Posted: 15/05/2012 07:01 Updated: 15/05/2012 07:06
Fuel duty could rise
Motorists could face a 50% rise in fuel duty in future years to cover a £13bn hole in Treasury coffers, according to a report.
The gap in public finances will come from increasing use of more fuel-efficient cars and a switch to electric vehicles, the RAC Foundation-commissioned report said.
It added that while the fuel duty collected by the Exchequer stands at 1.7% of gross domestic product (GDP), this rate will tumble to 1.1% of GDP by 2029.
The report said vehicle excise duty (VED) would also drop over this period, from 0.4% of GDP to 0.1%, with the combined fall leading to the £13 billion shortfall.
RAC Foundation director Professor Stephen Glaister said: "If the Chancellor was faced with a £13bn shortfall in motoring tax revenue today, he would need to push the rate of fuel duty up from 58p per litre to 87p per litre to fill the financial black hole.
"Clearly there is no guarantee that future rises in duty rates will be limited to inflation, as is current policy."
He added: "As drivers endure record prices at the pumps they might be surprised to learn that future governments face a drought in motoring tax income.
"The irony is that while ministers encourage us to buy greener, leaner cars, they are being forced to look at ways of clawing back the money motorists think they will be saving. This isn't scaremongering. The Treasury has already announced a review of VED bands to ensure drivers make a fair contribution to the public finances even as cars become more fuel-efficient."
The report was prepared for the RAC Foundation by the Institute for Fiscal Studies.
Institute director Paul Johnson said motoring taxation did not reflect the costs drivers impose on others and that revenue from petrol was set to fall.
He added: "A national system of charging related to mileage and congestion, largely replacing the current system of fuel taxation, would help solve both those problems."
Ah, the old 'lets make something sound so bad it scares a Nation into accepting something that it would never have previously done, this is a potential propaganda exercise ! Probably the beginning of many to try and have us accept the loss of our travel privacy and end up costing us more in the long term (already proven by a TV show that looked into it a little while back).
It is disgusting to punish all those who need or want to travel, (as if it is some kind of luxury) but to then use the motorist, as a form of cash-cow to prop up the economy is shameful. To sell this as a worse system than road charging is simply, well, extremely mis-guided. To say so in such a manner that tries to make road charging as the lesser of two evils is and make us
want road charging is nothing short of underhand & disgraceful tactics ! How about we have neither, and therefor, non of the overheads (and the millions of mistakes and errors) that road charging will end up costing us all too !
The damage done to the whole economy and road safety will be extreme. All products will cost more, as every service and product provided will have to add on the extra fuel costs. Do they never stop to think that if people have to spend more precious money on fuel they cannot then spend it on maintenance ? If taking more vehicles off the road is the point then maybe .....
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saw it earlier today.