British fuel is most heavily taxed in Europe


Petrol Prices

Drivers in UK pay the highest rate of fuel tax of any European Union country, a new study by the RAC Foundation has found.

Currently, a whopping 61 per cent of the price of a litre of petrol goes straight into Government coffers as a combination of fuel duty and VAT. That figure stands at 59 per cent for diesel.

Britain tops the tables for European fuel tax despite fuel duty having been frozen by the Government since March 2011.

Now motorists will be holding their breath to see if driving is likely to put an even bigger dent in their finances, as chancellor George Osborne prepares to deliver his annual budget later this month.

Compared to the 27 other EU states, we pay the highest proportion of tax for diesel and the second highest for petrol.

Only drivers in Sweden are similarly fleeced, coughing up 62 per cent of the price of a litre of unleaded in tax (the highest overall rate) and 56 per cent on diesel.

However, drivers in the Scandinavian country enjoy cheaper fuel, with both diesel and petrol costing around £1.24, compared to £1.30 for unleaded and £1.37 for diesel here in the UK.

Before tax, Britain has some of the cheapest fuel prices in the Union, but the Government levies mean we pay the second highest overall price for diesel and the ninth highest for petrol.

Italy's motorists enjoy lower tax rates, but the high price of their fuel means they pay the most overall to fill their tanks.

Drivers in Luxembourg get the best deal, with not only the cheapest fuel, but also the lowest tax rate at 41 per cent.

Prof Stephen Glaister, director of the RAC Foundation, said: "On 19th March the Chancellor will deliver his budget. He has made much of the fact that fuel duty has not risen for three years. However this has made little impact on the huge proportion of tax the UK's 36 million drivers pay on their fuel," reported The Telegraph.

"The irony is that if you take tax out of the equation we actually have the fifth cheapest diesel in the EU and the second cheapest petrol."