Quote Originally Posted by Eric the Half a Bee View Post
I understand fuel duty is paid per litre (nearly 53p for petrol pl) and that VAT is then added based on the overall cost.

If that is so, would the extra gained in VAT cover the 5p reduction of a few months ago and could any further cuts in duty be offset by VAT?
VAT is charged on the whole price, so if the cost is say £1, which includes the 53p duty, then the cost is £1.20 at the pumps. If fuel duty drops to say 40p per litre, and we suspend reality for a second and assume the petrol companies pass on the saving, then the pre VAT cost is £0.87 and the with VAT price is £1.04