Drivers 'missing out on duty cut'

Many motorists are missing out on the 1p a litre fuel duty reduction announced by the Chancellor in the Budget (PA)

Many motorists are missing out on the 1p a litre fuel duty reduction announced by the Chancellor in the Budget, according to AA figures today.

Following Mr Osborne's decision, average petrol prices have only dipped 0.6p a litre, while average diesel prices have only gone down 0.57p.

The 1p cut should have taken effect from 6pm on Wednesday.

Today the AA said that, as of yesterday, the average petrol price was 132.93p a litre compared with 133.53p a litre on Wednesday before the Budget.

It added that diesel had fallen from 140.26p a litre on average on Wednesday to 139.69p yesterday.

The AA said Shell had passed on the cut at its service stations as had supermarket Morrisons

AA president Edmund King said: "The latest fuel prices clearly show that not all garages have passed on the Budget's 1p cut in fuel duty. Drivers have long memories and will remember those garages that have not passed on the cut.

"Prices falling three-fifths of the Chancellor's duty cut rams home what the AA has been saying since 2005 - the market needs transparency to protect the interests of drivers, retailers and suppliers.

"Without it, how does the consumer know whether wholesale price movements announced by the people who sell fuel are accurate or not? They track oil, wholesale and pump prices in the US, Australia and South East Asia, so why not here?"

Mr King went on: "On Monday, OFGEM accused the electricity suppliers of putting up prices quickly and bringing them down slowly - exactly the way drivers perceive the way they are treated by retailers.

"The road fuel industry desperately needs a regulator to act as honest broker between drivers, retailers and suppliers. If we had one, accusations of rip-off petrol stations would be answered fairly. Rising oil prices will simply add fuel to the fire of suspicion, and driver backlashes will become more common."

Mr King continued: "In all the furore, the one thing that has been forgotten is that the frozen duty and the 1p cut in a time of rising prices stopped many lower-income and rural drivers being pushed over the edge by fuel costs they couldn't afford.

"If oil prices remain high, the 3.02p increase on January 1 2012 means that we will be going through this trauma again in nine months' time."

Prime Minister David Cameron urged garages to pass on the tax reduction and said there were ways to ensure "this market operates properly".

Speaking at a press conference in Brussels, he said: "Compared with what was going to happen it's a 6p reduction. And of course I want to see that passed on by garages.

"We have done what we can as a government to cut tax, it is now right that the market should respond.

"If the market doesn't respond, obviously there are ways for the Office of Fair Trading and others to make sure this market operates properly.

"We will be watching like a hawk to make sure the action we take actually helps consumers and helps motorists at the pump.

"We are obviously not responsible for the oil price which, as we know, can go up and down, but we've done what we can in terms of giving the consumer a break by cutting that fuel duty and making what was a multibillion effort to help consumers at this difficult time."