UK Chancellor Rishi Sunak has frozen fuel duty yet again in his autumn budget amid record prices at pumps across the country. The current rate of 57.95p per litre has remained since 2011, when then-Chancellor George Osborne introduced the fuel duty freeze.
Fuel duty was expected to rise in the last two budgets, but the government has seemingly resisted the temptation to increase a substantial revenue stream despite the cost of the coronavirus pandemic. However, with fuel prices hitting a record high in recent days, Sunak told the House of Commons the planned rise would be cancelled to keep the cost of living in check.
In his speech to MPs on Wednesday, October 27, Sunak said: “I’m not prepared to add to the squeeze on families and small businesses, so I can confirm from today the planned rise in fuel duty will be cancelled.”
However, it seemed the Chancellor made a small error in his speech, claiming fuel prices were at their highest level for eight years. But research from the RAC’s Fuel Watch Initiative said the average petrol price had risen to an all-time high of almost 143p per litre, breaking a record set in 2012.
Nevertheless, Sunak’s decision to retain the fuel duty freeze was roundly welcomed by the automotive sector, with the RAC’s fuel spokesperson, Simon Williams, saying the planned increase could have taken diesel prices to over 150p per litre. That said, Williams also lamented the decision not to cut VAT on fuel to ease the pressure on drivers’ wallets.
“We welcome the Chancellor’s confirmation that duty will continue to remain frozen at 57.95p a litre,” said Williams. “With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt. If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p taking the cost of a tank to over £80, and diesel an eye-watering 150p.
“But we’re disappointed he did not provide some respite for drivers at the pumps. As VAT is charged on the final cost at the pumps, a temporary cut in VAT to motor fuels would have benefitted drivers immediately at a time when filling up the car is hurting household budgets more than ever before as well as the wider economy as people will have less money to spend.”
But Green Party transport spokesperson Caroline Russell was less impressed, taking to Twitter to voice concerns about the policy. In her tweet, she claimed the government should be encouraging drivers to drive less while walking and cycling more regularly.
“A government serious about meeting climate commitments would not freeze fuel duty for yet another year,” she tweeted. “Say it after me, Mr Sunak. Meeting net zero means driving less and walking, cycling and catching the train or bus more.”