Wednesday 3 October 2012
Petrol sales slide could have cost Treasury £1billion
A “huge” drop in petrol sales in the UK earlier this year could have cost Treasury coffers by more than £1billion since 2008.
Statistics from the Department of Energy and Climate Change show more than two billion fewer litres of petrol and diesel were sold on forecourts in the first half of this year compared to the same period in 2008.
This was the worst second quarter drop in fuel sales since the credit crunch and the first time since the turmoil of 2008 that fuel stations sold substantially less petrol between April and June than in January to March.
Edmund King, president of motoring group AA said today: “A 10.6% fall in petrol sales this past quarter is a huge drop. Whilst we welcome the fact that new cars have become more fuel efficient, this goes nowhere near to accounting for the crash in demand over the past three months and the past five years.”
The drop in demand could have cost the Treasury a whopping £1.3billion since 2008 in lost tax revenue.
Campaigners used the figures as a chance to press for a cut in fuel duty to create jobs and boost GDP.
Howard Cox from FairFuelUK said: “Today's reported loss of revenue from reduced fuel consumption shows that the incredibly high prices at the pumps are self-defeating in terms of tax revenue for the treasury. With 60% of these high prices going in tax, the Government can really make a difference by getting the UK economy motoring, simply by cutting the duty now!”
However the Treasury suggested the billion-pound figure is dwarfed by the £5.5bn of cuts and delays to increases in fuel duty that the Government has brought in.
A spokesperson said: "The Government is aware that fuel sales have fallen since 2008 and this is factored into the Office of Budget Responsibility’s (OBR’s) forecasts for fuel duty receipts. Its forecast for tax receipts was published at Budget and shows that fuel duty receipts are due to increase from 2011-12. The OBR will publish updated forecast figures at Autumn Statement."
