Monthly rise in fuel duty receipts is bad news for net-zero targets

Today’s HMRC monthly tax receipts show fuel duty receipts from April 2024 to November 2024 are £16.7bn, down £77m on the same period last year. Despite this, fuel duty receipts rose 14% month-on-month to £2.2bn in November 2024, the highest level since August 2023.

Sheena McGuinness, Head of Renewables and Cleantech at RSM UK, said: “Given that fuel duty has not been raised since 2010, the increase in revenues in November suggests an increase in the usage of petrol and diesel vehicles, which is concerning in light of the government’s net-zero targets. That said, diesel receipts have decreased, which as the highest polluting fuel, is positive news.

“The government faces a fine balancing act between the cost of living crisis and increasing fuel costs. For many lower income households, electric vehicles (EVs) are simply out of reach, so raising fuel duties would hit them the hardest.

“A more carrot as opposed to stick approach is needed to encourage the uptake of electric cars but also to avoid penalising those that cannot afford to purchase EVs. Such incentives could include imposing no congestion charge for such vehicles, free on-street charging and no VAT on EVs.”