A new campaign from the TaxPayers’ Alliance (TPA) and the Petrol Retailers’ Association (PRA) is giving motorists a much-needed wake-up call as it highlights the burden of excessive fuel taxes in a bid to raise pressure on the Treasury to cut fuel duty.
More than 5,000 signs that show motorists exactly how much of their cash is going straight to the Treasury were put up in independent forecourts across the UK last month. The ’fuel tax stands’ display a breakdown of where money spent on filling up the tank goes. When drivers pay £30 at the till, around £18 of that is paid straight to the government, with only the remaining £12 covering the cost of the fuel including just £1 to the retailer.
The aim of the campaign is to inform people that 60% of what they pay at the pumps goes straight to the taxman. The TPA argues that, with greater transparency at the tills, pressure will mount on the Chancellor to cut fuel duty by 5ppl over five years or, at the very least, to freeze fuel duty for the rest of this Parliament.
Matthew Sinclair, chief executive of the TPA, said: "Fuel duty is an excessive and unfair burden on struggling families, whether they need to get to work, take their kids to school or do the weekly shop. Businesses also struggle with the rising costs of moving their goods. Too often staff in the forecourts get the flak for high fuel prices which are really the result of exorbitant taxes set by politicians.
"That is why we produced the new fuel tax stands to show customers how much tax they actually pay when they fill up. By displaying it on their counter, retailers will be able to set people straight when they vent their frustration over high petrol and diesel prices. Fuel duty should at least be frozen for the rest of this Parliament, and motorists really deserve a cut in excessive taxes."
PRA chairman Brian Madderson added: "We believe that the fuel tax stand is the perfect way to help explain to our customers that far from profiteering from high fuel prices, retailers are also suffering as the government takes 60% of the cost of every litre. This amounts to a total tax-take of more than £30bn from forecourts every year."
Following the launch of the campaign, a YouGov poll for The Sun newspaper which is supporting the PRA and TPA’s crusade, with a continuation of its own ’Keep it Down’ crusade which aims to win a fair deal for motorists revealed that half of motorists do not realise that 60% of the price of fuel at the pump is tax. When asked if 60% of the cost of unleaded was too much, too little or about right, 87% said it was too much, 6% said about right, 2% said too little and 4% didn’t know.
In addition, 85% of motorists polled said the Chancellor should cancel January’s planned increase in fuel duty, while just 9% said the Treasury should go ahead with the hike, and 4% didn’t know.
Symonds Forecourts’ site in Bristol, a MRH site in South London, a forecourt in Birmingham run by HKS, and a Manor Service Stations site in Cheshire all had help putting up the fuel tax signs from Page 3 girls.
Nick Lloyd, managing director of Symonds Forecourts, said: "Poppy was a very charming girl! The PRA has done a fantastic job with the TaxPayers’ Alliance to highlight where motorists’ money goes. The campaign is raising awareness of the level of fuel tax because there’s a huge misconception out there."
Meanwhile, Andrew Hindmarch of Hindmarch Garage in Stamford, Lincolnshire, said the campaign has got his customers talking. "Anything that stops folk thinking it’s us ripping them off or us making a fortune out of fuel is good. Most folk don’t realise how much tax is paid on fuel they think it’s us. In effect we are just a big tax collector for the government. I don’t know what difference the campaign will make to the government but hopefully it will change motorists’ perception. When we tell them that they’re paying duty and then VAT on top so a tax on a tax they don’t like it."
However, Mervyn Campbell, who runs a Topaz-branded Ballydown Service Station in Banbridge, County Down, believes the amount marked for the retailer £1 has been massively understated. "That’s not a true figure it should be more like 43p on £30 of fuel. I don’t know where the PRA got that figure. It is scary when you see how little we get."
A website allowing users to write directly to their local MP about the level of fuel tax accompanies the campaign. The FreezeFuelTax.com online petition calls on the government not to increase fuel tax any further.
Fuel tax facts
l The UK has the highest fuel tax regime within the EU with duty on diesel and petrol currently at 57.95ppl, plus 20% VAT on top of the retail price.
l The UK is the only EU member not to have duty on diesel at a lower level to petrol. Harmonisation of duty took place under Labour.
l Only Norway and Turkey have higher fuel tax on a global comparison.
l The Chancellor deferred a duty rise of 3.02ppl earlier this year to August 1, 2012.
l Under public pressure from the PRA and other organisations, the Chancellor again deferred this 3.02ppl, increase just days before it was due on August 1, 2012 to January 1, 2013.
l This raises the prospect of a double increase in the early part of 2013 to push pump prices up by as much as 7ppl.
l The amount is estimated using the known increase on 1/1/13 of 3.02ppl + 20% VAT = 4ppl total.
l From 1/1/13 duty will be 60.97ppl.
l Another rise has been announced for 1/4/13 which is based on the Office for Budget Responsibility (OBR) forecast of the Retail Price Index (RPI) level in Q3/13. Assume inflation running at 3% for RPI, then duty would increase by 60.97ppl x 3% = 62.80ppl or a jump of nearly 2ppl.
l Adding 20% VAT brings the increase in Q1/13 to around 6.50-7ppl.
l The Parliamentary summer recess ends on September 3, and about 11 weeks later towards the end of November, the Chancellor will deliver an Autumn Statement setting out fiscal measures for 2013/14.