The Treasury lost £2.4 billion worth of fuel duty revenue in two months as a result of the coronavirus lockdown.
Fuel duty was down from £1.5 billion in April 2019, to £815 million in April 2020, as well as down from £1.4 billion in may 2019, to £695 million in may 2020, as drivers stayed at house according to lockdown rules.
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The biggest loss in revenue was from diesel sales, which saw a 49 per cent decrease from £2.9 billion in April as well as may 2019, to £1.5 billion in the exact same period this year, according to HM revenue as well as Customs figures analysed by the RAC. Meanwhile, revenue from fuel duty on petrol fell from £1.6 billion, to £634 million over the exact same period of time.
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The overall of £2.1 billion fuel duty taken in April as well as may 2020 was so low, it was similar to the monthly figure just for may 2015, which HMRC records show was £2.4 billion.
The RAC likewise reports that just 50 per cent of the vehicles covered by its telematics insurance coverage policies were on the road during April as well as may 2020, which was the height of the UK’s coronavirus lockdown.
Nicholas Lyes, head of roads policy at the RAC, said: “The monetary effect of coronavirus on the government has clearly been immense. The lost revenue on fuel duty is a further strike to the public finances and, while motor web traffic volumes have recuperated during the summer, they are still between 10 to 15 per cent below pre-lockdown levels.
“The temptation for the Chancellor may be to recoup a few of the losses by increasing fuel duty, however with the country staring down the barrel of one of the sharpest recessions on record, such a move would danger choking any type of economic healing each time when drivers as well as businesses are most struggling.
“This perhaps provides the government a glimpse into the future of when fuel duty revenues begin to decline more sharply with the increase of electric as well as other additionally fuelled vehicles. Treasury officials may want to begin believing about exactly how the government approaches such a situation thinking about fuel duty normally produces around £27bn a year.”
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