Fuel duty hike would cause ‘untold damage’ next week
Fuel duty: Proposed 12p increase branded 'disgusting' by campaigner
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February saw the average price of a litre of unleaded petrol come down another penny (1.26p) to 147.72p, while diesel dropped 3.19p to 167.19p. The falls make the cost of filling a 55-litre family petrol car £81.25, which is down £0.69 from £81.94 a month earlier.
Diesel drivers are also seeing larger savings, with an average tank costing £91.95, down from £93.71 at the start of February.
While the reduction in price will be welcomed by motorists, wholesale price data analysed by the RAC shows drivers of the UK’s 12 million diesel cars continue to pay a needlessly high price every time they fill up.
Despite there being just a 6p difference between the wholesale prices of both diesel and petrol throughout all of February, diesel pump prices are currently a colossal 20p more than petrol.
This means anyone filling a diesel car is, the RAC calculates, paying around £7 more per tank than they should be if diesel was being sold at a fairer price of around 155p a litre.
Simon Williams, RAC fuel spokesperson, said: “A reduction in pump prices would normally be extremely welcome news for drivers, not least in a cost-of-living crisis that is making the price of so many everyday items and services much more expensive than normal.
“But while our analysis shows drivers of petrol cars are paying a fair price at the pumps, the same sadly can’t be said for anyone whose vehicle runs on diesel.
“Retailers really ought to demonstrate they’re on the side of drivers by cutting their diesel prices now – not least as the wholesale price is on a par with where it was 12 months ago, yet the price they’re charging drivers at the pumps remains needlessly high.”
What’s more, drivers face a “pump price shock” in less than two weeks with Chancellor Jeremy Hunt’s Spring Budget on March 15.
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Many experts have called on the Chancellor to keep the 5p cut on every litre of fuel which was put in place last March.
If the duty cut was to be removed as originally planned, the RAC says current petrol prices would rise to 153.72p and diesel to 173.19p when factoring in VAT.
Then-Chancellor Rishi Sunak announced the cut would last for a year, coming to an end on March 23.
Following the Autumn Statement, the Office for Budget Responsibility published its Economic and Fiscal Outlook report which included information about a potential fuel duty change.
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It suggested that there would be a planned 23 percent increase in the fuel duty rate in late March 2023, which would add £5.7billion to Government coffers.
If this does go ahead, it would be a record cash increase ad be the first time any Government has raised fuel duty rates in cash terms since January 2011.
Commenting on the fuel duty rates, Simon Williams said all eyes are on what the Chancellor will decide to do.
He added: “While we accept the 5p cut introduced last year can’t last forever, with household finances under even more pressure this Spring than they were a year ago, we don’t think now is the time to be removing it.
“To decide to raise prices by 5p on both fuels would prove punishing to households and businesses struggling to make ends meet, and may have a detrimental effect on both inflation – which the Government is desperate to bring down – and the wider economy.”
Mr Williams highlighted how when it comes to diesel, any increase would mean the UK has the highest fuel duty rate in Europe.
He concluded, saying: “We also hope Mr Hunt isn’t about to become the first Chancellor in 12 years not to cancel the annual planned fuel duty rise.
“If he were to go ahead with it, untold damage could be caused.”
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