Fuel Duty revenue decreased during the coronavirus (or Covid) pandemic, and it has not returned to pre-coronavirus levels of £27.8 billion in 2019.
Petrol and diesel drivers face being “discriminated against” after being hit with an eye-watering £24billion environmental tax. Energy taxes is the largest category of environmental taxes, which raised £40.4 billion in 2024.
This category predominantly comprises Fuel Duty on petrol, diesel and other fuels. This raised £24.6 billion in 2024, 60.9% of the total energy tax revenue, and has been the largest contributor to total environmental energy tax revenue since 1997.
Fuel Duty revenue decreased during the coronavirus (or Covid ) pandemic, and it has not returned to pre-coronavirus levels of £27.8 billion in 2019.
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Other energy taxes, such as the Climate Change Levy and Renewable Energy Obligations, have also contributed to the overall revenue, but to a lesser extent compared with Fuel Duty.
Jack Cousens, head of roads policy at the AA, said: “Drivers will be staggered by how much the burden of fuel duty contributes to environmental tax in the UK.
“Most will accept that fossil fuel car use comes with some level of tax penalty but the share of the tax-take will be a shock.” He also noted that many environmental taxes levied on councils against motorists are disguised as “charges”, with suggestions that the frequency of these costs has “ballooned” since 2008.
Mr Cousens added: “Environmental taxes now being levied by councils, including those that can reasonably be labelled as stealth taxes, include CO2-related residents parking permits, diesel-related residents parking permits, diesel-related public parking charges, workplace parking levies, city or town parking costs where the council has stated a CO2 justification for high fees.
“These types of charges potentially discriminate against low-income households who may own older cars but don’t use them much.”
The Parliamentary Transport Committee raised this issue in 2009, expressing concern over the growing tendency to link service charges to broader policy objectives.
The committee emphasized that charges, including parking fees, should not be arbitrary. Instead, it called for these charges to be “proportional, clearly defined, and thoroughly justified” when they are intended to serve broader policy goals.