Fuel Tax
In short
A compulsory levy imposed on the sale of energy sources, most commonly used on petrol and diesel for transport. It serves as a way for governments to collect revenue or encourage greener driving habits.
In plain words
It is an extra cost added to the price of fuel. You pay this money to the government every time you fill up your vehicle. This money helps pay for roads or protects the environment.
A simple example
When you buy a litre of petrol at a service station, a portion of the total price is the fuel tax. This specific amount goes directly to the state rather than the petrol company.
Why it matters
It provides huge amounts of money for building and fixing motorways. It can also be raised to make driving more expensive, which helps reduce pollution and climate change.
Easy to mix up
Do not confuse it with VAT, which is a general tax on almost all goods and services.