Fuel Price Escalator
Encyclopedia
The Fuel Price Escalator (FPE) was the practice of automatically increasing hydrocarbon oil duty
(better known as 'fuel tax') in the United Kingdom
ahead of inflation. The escalator was introduced as a measure to stem the increase in pollution from road transport and cut the need for new road building which was then a politically sensitive topic. The escalator also resulted in significant increases in revenue for The Treasury
.
The fuel price escalator was introduced by the Conservative government in 1993 and set at an annual increase of 3% ahead of inflation, later rising to 5%. After gaining power in 1997, the rate of increase was raised by the Labour government to 6% per year. The last rise due to the escalator took place following the budget on 9 March 1999. Tax increases above inflation have not ceased, however: the increase in fuel duty for 2009 was above inflation and the tax is planned to increase "on 1 April from 2010 to 2013 by 1 ppl above indexation in each year."
The end to the escalator was announced on 9 November 2000, following the UK fuel protests, of which it was a contributory factor. When the escalator ended, fuel in the UK was the most expensive in Europe, with fuel tax representing over 75% of the retail price of fuel. In 1993 UK fuel had been amongst the cheapest in Europe.
Hydrocarbon oil duty
Hydrocarbon oil duty is fuel tax levied on some fuels used by road vehicles in the United Kingdom. Between 1993 and 1999 the Government's Fuel Price Escalator led to significant rises in the cost of fuel which led to fuel tax protests in 2000, 2005 and 2007. In May 2008, UK fuel tax rates were one...
(better known as 'fuel tax') in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
ahead of inflation. The escalator was introduced as a measure to stem the increase in pollution from road transport and cut the need for new road building which was then a politically sensitive topic. The escalator also resulted in significant increases in revenue for The Treasury
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
.
The fuel price escalator was introduced by the Conservative government in 1993 and set at an annual increase of 3% ahead of inflation, later rising to 5%. After gaining power in 1997, the rate of increase was raised by the Labour government to 6% per year. The last rise due to the escalator took place following the budget on 9 March 1999. Tax increases above inflation have not ceased, however: the increase in fuel duty for 2009 was above inflation and the tax is planned to increase "on 1 April from 2010 to 2013 by 1 ppl above indexation in each year."
The end to the escalator was announced on 9 November 2000, following the UK fuel protests, of which it was a contributory factor. When the escalator ended, fuel in the UK was the most expensive in Europe, with fuel tax representing over 75% of the retail price of fuel. In 1993 UK fuel had been amongst the cheapest in Europe.
See also
- Energy policy of the United KingdomEnergy policy of the United KingdomThe current energy policy of the United Kingdom is set out in the Energy White Paper of May 2007 and Low Carbon Transition Plan of July 2009, building on previous work including the 2003 Energy White Paper and the Energy Review Report in 2006...
- Energy use and conservation in the United KingdomEnergy use and conservation in the United KingdomEnergy use in the United Kingdom stood at 3,894.6 kilogrammes of oil equivalent per capita in 2005 compared to a world average of 1,778.0. In 2008, total energy consumed was 9.85 exajoules - around 2% of the estimated 474 EJ worldwide total...
- Elasticity (economics)Elasticity (economics)In economics, elasticity is the measurement of how changing one economic variable affects others. For example:* "If I lower the price of my product, how much more will I sell?"* "If I raise the price, how much less will I sell?"...
- Fuel taxFuel taxA fuel tax is an excise tax imposed on the sale of fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation...
- Twyford Down road building protestsTwyford DownTwyford Down is a small area of ancient chalk downland lying directly to the southeast of Winchester, Hampshire, England. The down's summit, known as Deacon Hill, is towards the north-eastern edge of the area which is renowned for its dramatic rolling scenery, ecologically rich grassland and as a...
External links
- September 2000, Friends of the EarthFriends of the EarthFriends of the Earth International is an international network of environmental organizations in 76 countries.FOEI is assisted by a small secretariat which provides support for the network and its agreed major campaigns...
: Blair must explain fuel tax - November 1999, Ford Motor CompanyFord Motor CompanyFord Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
: Ford welcome the end of the annual fuel duty escalator