§ Mr. Timms
In October 1999 the duty rate for higher octane unleaded petrol was cut from over 5 pence per litre to 2 pence per litre above the rate for unleaded. This was to facilitate the introduction of lead replacement petrol (LRP) which is treated as higher octane unleaded petrol for duty purposes. Following increases in road fuel duties announced in the Budget the rate of duty on higher octane unleaded petrol is now 2.07 pence per litre above that on unleaded petrol.
Although LRP does not contain lead, it will generally be used by cars that formerly used leaded petrol. This part of the car population tends to be older, less fuel efficient than newer cars and, consequently, to have poorer emissions performance. The twin aims therefore are to have a duty rate that is not as high as that on leaded petrol—indeed is less than the former rate on higher octane unleaded—but at the same time to leave in place a measure that encourages replacement of less fuel efficient cars.