Budget Increases on Petrol, Oil and Power Alcohol
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ON Tuesday, Sir John Simon introduced his first Budget and the changes in taxation which he an
nounced included the increase of the Customs duty on light hydrocarbon oils and heavy oils from 8d. to 9d. a gallon and a new Excise duty of 9d. a gallon on power methylated spirits. No modification of motor-vehicle taxation is contemplated.
The Chancellor said he proposed to call for a moderate increase in the petrol tax which had stood at 8d. since 1931. The duty on light oils would be increased to 9d., from six o'clock that (Tuesday) evening. There would be a similar increase of the duty on heavy oils used for road transport which his predecessor raised in 1935 to the same rate as that on petrol. He expected from it an additional revenue of 25,000,000 in the current year.
To avoid any misunderstanding he must make it clear that this increase applied only to light hydrocarbon oils, and heavy oils used for road transport The present duty of Id. a gallon on heavy oils used for any purpose .other than road fuel remained unaffected. As a corollary to the petrol tax, he proposed to place an Excise duty of 9d. a gallon on power alcohol. The practice of mixing a proportion of power alcohol—power methylated spirits—with petrol had grown remarkably in recent years, and, in his opinion, the time had come to tax it equally with the petrol in which it was placed. This would come into force on May 2 and he expected it to yield 4350,000 in the current year.
The respective estimates of increase in yield for a full year, as stated in the printed Financial Statement, are for oil duties 45,300,000 and for power methylated spirits 2375,000. The approximate receipts for the oil duties were in 1937-38, 250,143,000.
The " M'Kenna duty" on motorcars and motorcycles brought in 41,688,000 in the past year and the receipts in 1938-39 are estimated at 41,800,000. The revenue from motorvehicles duties in 1937-38 was 234,608,000, and the receipts on the basis of existing taxation in 1938-39 are estimated at 436,000,000—an increase of 41,392,000.