photo credit: respres

Petrol Prices are about £1.33 per litre.

Of that, about 59p is fuel duty and VAT is 22p and the fuel itself is 52p

In April fuel duty is due to rise by RPI +1p – Labour set this level of tax increase a few years back and happily George Osborne is thinking he can waive the 1p

Now, for a government that is saving cash by any which way, scrapping the 1p seems a luxury, so can they afford it?

Well, RPI is supposed to be near, but slightly above 2% and fuel is supposed to be below 40p per litre.

So, they expected to be putting fuel duty up by roughly 0.8p +1p so 1.8p per litre + VAT (total 2.16p)

So, with RPI at 4.8% and fuel at 52p,  fuel duty is scheduled to go up by 3.5p + VAT (total 4.2p)

So, if George Osborne  waives the 1p +VAT  on duty he’ll still be making more than he expected. (He’ll still make 3p instead of the expected 2.16p)