Drivers face collectively forking out an extra £3billion at the pumps over the next year if Jeremy Hunt scraps the 5p-per-litre fuel duty cut, according to analysis.
The Chancellor is weighing up whether to extend the discount for another year in next month’s Budget to help families.
But there are fears he won’t – as prices have fallen well below what they were in March last year, when the cut was introduced by then Chancellor Rishi Sunak.
This week, average petrol prices were around 148.40p a litre and diesel 168.85p. But on March 23, 2022, when Mr Sunak announced the cut, they were 167.01p and 179.9p respectively.
Analysis by the RAC, corroborated by the Institute for Fiscal Studies, shows adding 5p a litre back onto fuel duty would collectively cause drivers to shell out around £2.5billion in 2023-24.
Drivers face collectively forking out an extra £3billion at the pumps over the next year if Jeremy Hunt scraps the 5p-per-litre fuel duty cut, according to analysis
When the extra penny that this would attract in VAT is added, this hits £3billion. The projection is based on duty receipts banked by the Government in 2019, the last full year not hit by the Covid-19 pandemic.
The RAC’s fuel spokesman, Simon Williams, said: ‘We strongly urge the Chancellor to leave the duty cut in place for another 12 months to support drivers and businesses in the cost-of-living crisis…’. A Government source said ‘no decisions’ have yet been made on fuel duty rates.
