UK to extend planned cut in petrol duty

Finance ministry pledges temporary tax reduction on all petrol as election nears

The UK government will cut fuel duties on all unleaded petrol rather than just low-sulphur grades in next month's 2001/2 budget announcement, the country's finance ministry said yesterday. The move marks a further political concession to last year's fuel tax protesters and motorists in general as Britain gears up for a likely general election this spring.

Many European countries introduced real-terms cuts in petrol duties following the events of September (ENDS Daily 18 September 2000). But the UK government signalled last November that it would instead offer mainly in-kind benefits to hauliers and motorists. In addition, said the finance ministry, the March budget would include a UK£0.02 (euros 0.03) per litre cut in duty on petrol containing under 50 parts per million (ppm) sulphur to encourage its wider use (ENDS Daily 8 November 2000).

Now, it says, the duty cut is to apply to all unleaded petrol from budget day (7 March) until 14 June. The reason for the shift, the ministry explained, was to avoid harming the UK's 5,000 independent petrol retailers. Latest information suggested that low-sulphur petrol should be widely available by March, but this group might need longer to obtain supplies because of capacity constraints at UK refineries, it said.

Overall, the ministry, continued, the move would ensure that low-sulphur petrol was introduced across the country "in the smoothest way," and that "all motorists would be able to benefit from a cut in petrol duty on budget day".

Follow Up:
UK finance ministry, tel: +44 20 72 70 50 00, and press release.

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