Chancellor John Healey is reportedly considering the introduction of a tax on imported fuel as part of his upcoming Budget, aiming to address disparities between domestic and foreign fuel suppliers related to environmental levies. The proposed measure, referred to as a ‘green tax,’ would seek to level the playing field by applying net zero-related charges to imported fuel, which currently escapes such costs, unlike UK refineries.

The move comes amid concerns that British refineries face a competitive disadvantage because existing environmental levies only apply to domestically produced fuel. By extending these charges to imports, the government hopes to encourage decarbonisation efforts across the supply chain while maintaining fair market conditions.

However, the proposal has drawn criticism from some quarters. John O’Connell of the TaxPayers’ Alliance described the potential tax as a “shameless tax raid disguised as environmental policy.” He warned that imposing carbon charges on imported fuel would act effectively as a tariff, likely pushing up prices at the petrol pump and increasing supply chain expenses for households across the country.

No official details on the tax’s structure, rates, or implementation timeline have been released, and the Treasury has yet to confirm the inclusion of this measure in the final Budget. The debate highlights the complexities governments face in balancing environmental goals with economic and consumer price considerations on energy policy.