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Brown reveals fuel tax hike

Date: 06 December 2006   |   Author: Guy Bird

Filling-up will be more expensive

Chancellor Gordon Brown announced in his Pre-Budget Report that duty on fuel will go up by 1.25 pence per litre from midnight tonight on diesel, petrol, biofuel and CNG.

Vehicle drivers will pay more for each litre of fuel they buy from 7 December, but the Chancellor dismissed the idea of bringing back the fuel duty escalator, stating in his speech: "I will not restore the fuel duty escalator and I have rejected a real terms increase in fuel duty."

Drivers of LPG suffered the biggest increase - equivalent to 2.25ppl - but this still makes the fuel roughly half the price of mainstream fuels per litre, and keeps with Brown's commitment to reduce LPG's duty differential with diesel and petrol by no more than one pence per year.

For now, biofuel remains about 2ppl less than petrol at the pumps (see table bottom of page) but Brown also promised in the PBR speech to extend tax breaks to make the fuel more competitive in the near future.