Budget 2011: at a glance

* Fuel duty cut * Fair fuel stabiliser introduced * Company car tax changes, too...

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What Car? Staff
23 Mar 2011 15:35 | Last updated: 14 Jun 2018 00:03

Fuel duty will be cut by a penny per litre at 6pm tonight, but still looks set to increase by around 6p per litre next year.

Fuel duty will increase by RPI inflation next January, Chancellor George Osborne said in his budget today, and then by the same measure in August under the new 'fair fuel stabiliser'.

Osborne is proposing this increase in duty should be restricted to inflation if crude oil prices remain high. The Government is proposing this should mean $75 a barrel.

If crude oil drops below this level, duty will increase by RPI inflation plus an extra penny per litre.

Other measures include an increase in road tax costs, tougher company car tax levels, improved mileage rates for business users, and 100 million for councils to repair potholes

Main fuel duty
• Fuel duty will be cut by a penny per litre, from 58.95p, at 6pm tonight, March 23, 2011. Whether pump prices will actually fall by this amount, or if forecourts keep the price the same and take the money off the top, remains to be seen.

• Fuel duty will increase in line with RPI inflation of 5.5% next January 1, 2012, a jump of 3.02p per litre.

• The Labour-introduced automatic fuel duty escalator has been scrapped for the term of this Government and is replaced by a 'fair fuel stabiliser'. This will see a further inflationary increase in fuel duty on August 1, 2012. This could result in a total rise in duty of 6p per litre in 2012.

• The duty will be increased in line with RPI inflation only while oil prices are high.

• The Government is proposing a trigger level of $75 a barrel, but will consult the oil industry and motoring groups on this level.

• If oil prices drop below this trigger, fuel duty will increase in line with inflation plus an extra penny per litre.

• The Government has also applied to the European Commission for permission to reduce fuel duty by 5p in the Inner and Outer Hebrides, Northern Isles, the islands in the Clyde and the Isles of Scilly.

Other news
• VED rates increased in line with inflation from April 1, 2011.

• Company car tax rates increase by one percentage point for cars emitting between 95g/km and 220g/km from April 2013.

• Maximum Approved Mileage Rates for using your private car for business increase from 40p to 45p a mile from April 6, 2011

• The fuel benefit charge used to calculate the tax on free fuel for company cars will increase by 800 to 18,800 from April 6, 2011.

• An extra 100m for councils to repair potholes was also announced.

• The duty differential for LPG will be maintained until January 1, 2012, when it will be reduced by 1p per litre. The duty differential for used cooking oil biofuel will end as intended on March 31, 2012.

The Budget as it happened
Replay our coverage of the Budget, here.

The Budget live on whatcar.com