From Next March, ultra low sulphur petrol and diesel will come down by 3p per litre and Brown said he expect 100% of petrol stations to be selling these fuels by the spring Budget. He also confirmed the widely leaked freeze on current levels of fuel duty until 2002 – and beyond if oil prices maintain their current levels.
Brown also extended the £55 discounted rate of Vehicle Excise Duty currently available on vehicles up to 1,200cc to 1,500cc and announced a comprehensive package of road tax reductions.
But Brown went much further than many anticipated, with a battery of new green incentives - including further discounts to the new CO2-based benefit in kind tax for cleaner fuels. Diesel cars will pay a supplement of 3 per cent of the car's price compared to petrol (up to a maximum of 35 per cent) to take account of their higher emission of particulates and pollutants, but Brown confirmed that the Government will introduce regulations to waive this diesel supplement for clean diesel cars achieving Euro 4 emission standards - although no cars currently on sale in the UK meet this standard.
On alternative fuels, Brown said the Government intended to provide further incentives to choose more environmentally-friendly company cars to compensate for the higher cost of new technologies and encourage the take up of environmentally friendly vehicles.
Electric cars will only have to pay tax on 9 per cent of a car's price; hybrid petrol/electric cars will receive a 2 per cent discount to compensate for the higher cost of the technology and a further discount for every 20g/km their C02 emissions are below the 165 g/km level. All cars running on gas will get at least a 1 per cent discount for their lower C02 emissions, more for every 20g/km their C02 emissions are below the 165 g/km level.
Additionally, in the run-up to Budget 2001, the Government will invite British industry to develop proposals for practical alternative fuels. Following consideration of these proposals the Chancellor will announce major reductions in duty rates for the most promising environmentally-friendly alternative fuels.
- Comprehensive details and in-depth analysis of the Chancellors Pre-Budget will appear in next week's Fleet News.