Impact of Increase in Duty on Petrol and Diesel Cars in the UK Car Market from 2019

Economics, AAF010-1

TABLE OF CONTENTS
Impact of increase in duty on petrol and diesel cars in the UK car market from 2019..........3
Impact of UK government to ban the sale of all petrol and diesel running car by 2032.......6
REFERENCES...........................................................................................................................9

Every governmental decision has some impact over the economy which has be
positive or negative. There are times when the actions taken by the government are seem to
be very harsh but will be having a long run benefits for the economy as a whole. UK is
currently facing the serious challenge of poor air quality and in order to reduce the
environmental risk it has decided to take some crucial initiatives. This essay presents about
the impact of rise in the duty on the petrol and diesel cars in UK and also banning the sale of
such cars by 2032 would have an impact on the car market and the economy. This will
provide a sound insight about the impact it have over the consumers and the businesses and
how things will change.
Impact of increase in duty on petrol and diesel cars in the UK car market from 2019
The cost of fuel has an influence over everyone. For everyone who choose to drive
faces the problem in regard to cost of fuel. Recently, the UK government has implemented
plan to increase the fuel duty on the petrol and diesel cars with the aim of reducing the
environmental risk because of poor air quality in the country which is very harmful for the
public health which costed up to £2.7 billion (approximately) in lost productivity in a year
(Namdeo and et.al, 2019). Government has also taken certain actions previously as well by
imposing punitive taxes on all the vehicles which are having major emission such as diesel
vans and other petrol and diesel vehicles. By imposing higher tax on the such vehicles
government aims at reducing the purchase of such vehicle and making a move towards
electric vehicles for everyone’s well being. The govt. is of the thinking that it will hold the
polluting cars for the longer. If such thing happens, it will have a huge impact over the
demand and supply of the cars (Mattioli, Wadud and Lucas, 2018). The increase in duty will
affect the purchasing power of the consumers with no assurance about the future plans that
the government might impose over it. This has led to decrease in the demand of petrol and
diesel cars in the country and also the increase in the fuel cost has also added to it.