VAT boosts fuel costs by 6p a litre over last year

It is not just soaring oil costs that have contributed to the increasing fuel prices, as The AA has calculated that the government is raking in as much as an extra six pence a litre in VAT compared to 12 months ago.

The motoring organisation calculated that the average litre of diesel, at 138.60p, generates 23.10p in VAT for the government at the new 20 percent rate, while last year's price of 116.11p produced 17.29p for every litre at the 17.5 percent VAT level, a rise of 5.81p.