THEME

Economic Instruments - Charges and taxes

Differential Fuel Taxation - Brief Summary (UK)

Differential Fuel Taxation, UK

Achievements
Considered successful (Tinsdale et al 1996, pp,23)
The market share of unleaded petrol rose from under 5% to over 50% by 1993 (Tinsdale et al 1996, pp23)
It is difficult to attribute further increases to the tax due to the mandatory fitting of catalytic converters since 1993 (Tinsdale et al 1996, pp23)
Lead emission halved (Tinsdale et al 1996, pp23)
Major incentive effect since consumers were informed of the situation, and the switch to unleaded fuel was a simple procedure (Tinsdale et al 1996, pp23)

Background
Introduced in 1987 following pressure from the Campaign for Lead Free Air (CLEAR) (Tinsdale et al 1996, pp22)

Design
Differential between leaded and unleaded fuels; initial differential was just less than 1p/litre (Tinsdale et al 1996, pp23)
Leaded petrol banned from 1^st January 2000 (http://www.environment.detr.gov.uk/unleaded/index.htm)

Related Instruments
Mandatory fitting of catalytic converters since 1993 (Tinsdale et al 1996, pp23)

References
Green Tax Reform, Pollution Payments and Labour Tax Cuts, S Tindale and G Holtham, Institute For Public Policy Research, London ,1996, pp22-23
‘Still running on Leaded Petrol?' Department of Environment, Transport and Regions, http://www.environment.detr.gov.uk/unleaded/index.htm

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