Fuel duty - what is it and how to manage it
It's an important variable in your fleet's operational cost, especially in a time when fuel prices are rising, but what exactly is fuel duty? How does it affect your fleet in 2023? And most importantly, how can you manage it effectively to prevent it from draining your resources?
In this blog post, we're going to take a deep dive into the world of fuel duty and share some practical ways to help you keep your fuel costs under control.
What is fuel duty?
Fuel duty is a tax imposed on petrol, diesel and other fuels used in vehicles. When you fill up your fleet's vehicles at the fuel station, a significant portion of the price per litre goes towards fuel duty.
Established by the UK Government, the rate of fuel duty is uniform across the country and set at a per-litre level, so the proportion of pump costs which go towards the duty rise as prices fall. Currently around 1/3 of what you pay at the pumps goes towards the duty.
What is the current rate of Fuel duty?
As part of the 2023 Budget, fuel duty was frozen at £0.5295 per litre until at least March 2024.
This rate applies to most types of fuel used in road vehicles, including unleaded petrol, diesel, biodiesel, and bioethanol. Some alternative fuels, such as liquefied petroleum gas (LPG), natural gas, and electricity for electric vehicles, have lower rates or are exempt from fuel duty altogether.
With fuel duty rises forecast from April 2024, it’s important to plan ahead to avoid this significantly increasing your fleet operating costs.
“Based on announced policy, petrol and diesel duty rates are set to rise by 5p plus RPI inflation in April 2024 and by RPI inflation every year thereafter.”
How to keep fuel costs under control
Fuel cost control tips
Managing fuel effectively is a key responsibility for those managing a fleet, especially considering the unpredictability in global affairs and energy production. Here are a few strategies to consider:
