The UK government has announced a five-pence-per-litre cut in fuel duty in a bid to ease the impacts of the increasing cost of living.
Chancellor Rishi Sunak revealed the change during the government's annual spring statement on Wednesday. The cut will start from 6pm tonight and will last for the 12 months until March 2023.
It's hoped the cut will support drivers as fuel continues to command high prices. This is partly due to Russia’s invasion of Ukraine, which has driven up the price of oil.
Fuel prices have repeatedly hit record highs over the last few months. The latest figures from data firm Experian Catalist showed the average price per litre of petrol was 167.3p on Tuesday, while diesel was 179.7p.
“The Chancellor has ridden to the rescue of UK families and businesses who use their vehicles not for pleasure but to function in their daily lives,” said AA president Edmund King.
“Since the start of the year, the 20p-a-litre surge in pump prices has been the shock that rocked the finances of families and particularly young drivers, pensioners and lower-income workers who need to commute each day.”
Although it welcomed the cut, the AA suggested that it won't go far enough unless forecourts adjust their pricing accordingly.
It also noted that 43% of drivers are cutting back on car use, compared with around 59% of young drivers and 53% of those on lower incomes.
“We're concerned that the benefit will be lost unless retailers pass it on and reflect a fair price at the pumps,” King said. “Average pump prices yesterday hit new records, despite the fall in wholesale costs.
“On top of the [fuel] duty cut, there has been a substantial reduction in wholesale road fuel costs feeding through to the forecourts since 9 March. That needs to drive lower pump prices also.
"The road fuel trade shouldn’t leave the Treasury to do the heavy lifting when cutting motoring costs.”
The RAC also welcomed the 5p reduction but said that it will only “bring prices back to where they were a week ago”, calling it “a drop in the ocean”.
“With the cut taking effect at 6pm tonight, drivers will only notice the difference at the pumps once retailers have bought new fuel in at the lower rate,” said RAC head of policy Nicholas Lyes.
“There’s also a very real risk that retailers could just absorb some or all of the duty cut themselves by not lowering their prices. If this proves to be the case, it will be dire for drivers. It also wouldn’t be totally unexpected, based on the biggest retailers not reducing their prices late last year when the oil price fell sharply.”
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Prices are really erratic, I pass some places where it varies by several pence one day to the next. I have adopted the tactic of topping up when I see a good price when before I would wait until low as normal.Today I passed a garage that was 168.5 yesterday but was 159.9 today so I looped back and jammed half a tank in.
My company (like many) heavily encouraged its drivers into PHEV's to cut tax and switched to paying government advisory fuel rates. These are only revised quarterly, last done 1st of March next due 1st June, obviously price rises have been considerable in this period so the company is having to make emergency top up payments to employees losing money doing their jobs every mile.
Whilst the amount of duty on fuel is ridiculous, it's happened for so long now that we and the oil companies have got used to it.
Therefore this cut in fuel duty will only briefly cut fuel prices before being quickly absorbed as more profit from more price rises by the unscrupulous oil companies rather than providing revenue for the (theoretical) benefit of the country.
When have we had a Budget that we all benefited from?