The treasury are taking 20% of £1.85 or whatever (37p) whereas before they were taking 20% of £1.25 (25p) because the VAT is charged on the total cost, including duty - so we are effectively paying twice; once in fuel duty and then again in VAT which is to a large part increased by the duty costs itself!
Although that is offset to some extent by fuel duty falling to it's lowest level in 14 years (52.95p a litre down from 57.95p a litre a few months ago.
In short, the treasury have knocked 5p off duty, but are getting an extra 12p in terms of VAT, so they are still getting 7p more a litre than, broadly speaking, before the Ukraine crisis. The best thing to do would be to temporarily reduce VAT on fuel to 10 or 15% really, although I am not sure how easy that is or whether it sets a precedent for doing so on all kinds of products.
Personally, I am not a fan of VAT as it's regressive and 20% is a big figure. Fuel is critical to the country and I would reduce it's VAT level anyway. Try telling that to the Green lobby though.
It's also worth noting that tax as a percentage of pump price is lower than it has been for a long time.
https://www.racfoundation.org/data/t...rice-data-page
Interesting Excel graph here on fuel prices
https://www.gov.uk/government/statis...ad-fuel-prices