Fuel Price Escalator
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The Fuel Price Escalator (FPE) was the practice of automatically increasing hydrocarbon oil duty (better known as 'fuel tax') in the United Kingdom ahead of inflation. The escalator was introduced as a measure to stem the increase in pollution from road transport and cut the need for new road building which was then a politically sensitive topic. The escalator also resulted in significant increases in revenue for The Treasury.
The fuel price escalator was introduced by the Conservative government in 1993 and set at an annual increase of 3% ahead of inflation, later rising to 5%. After gaining power in 1997, the rate of increase was raised by the Labour government to 6% per year. The last rise due to the escalator took place following the budget on March 9, 1999 [1].
The end to the escalator was announced on November 9, 2000, following the UK fuel protests, of which it was a contributory factor. When the escalator ended, fuel in the UK was the most expensive in Europe, with fuel tax representing over 75% of the retail price of fuel. In 1993 UK fuel had been amongst the cheapest in Europe.
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[edit] See also
- Energy policy of the United Kingdom
- Energy use and conservation in the United Kingdom
- Elasticity (economics)
- Fuel tax
- Twyford Down road building protests
[edit] External links
[edit] In the media
- September 2000, Friends of the Earth: Blair must explain fuel tax
- November 1999, Ford Motor Company: Ford welcome the end of the annual fuel duty escalator
