Energy sector awaits industrial strategy amidst fuel duty slump, says RSM UK

Today’s HMRC monthly tax receipts show fuel duty receipts from April 2024 to February 2025 are £22.6bn, which is £0.2bn lower than the same period last year. 

Sheena McGuinness, Co-Head of Energy and Natural Resources at RSM UK, said: “The latest fall in fuel duty receipts continues the downward trend of previous months, demonstrating that the government’s energy tax forecasts do not stand up to scrutiny given the shrinking tax base. While there has been a change in government and an increase in tax rates, this is not unfamiliar, and we know that higher tax rates often lead to lower tax revenues, which in this case, could be used to discourage investment and activity in the North Sea. 

“Although this could conceivably provide immediate relief in the short term, the data appears not to support this and could cause the UK to become reliant on overseas providers to meet our energy needs. We’re already seeing UK energy imports reaching a record high in the last quarter, which isn’t sustainable in the current geopolitical climate. This reinforces the importance of prioritising long-term growth to encourage reinvestment of profits, rather than a short-term approach.” 

She added: “The industrial strategy is expected later this year, which suggests government is focusing on a long-term strategy. However, if the government is committed to delivering the UK’s energy transition, this needs to come sooner rather than later, providing clean energy businesses with a clear framework to innovate and invest with confidence. We’re also still waiting for further announcements on GB Energy to boost domestic energy generation, create jobs and drive economic growth.”