Pump prices could ‘rocket’ if fuel duty freeze is lifted, motoring groups warn

Combination of a weaker pound and higher oil prices is already putting pressure on motorists, experts warn

Caitlin Morrison
Tuesday 03 July 2018 12:52
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Motoring groups have slammed government plans to lift the fuel duty freeze that has been in place for the last eight years, and warned such a move could cause pump prices to rocket.

The government is reported to be seriously considering raising taxes on fuel as part of new efforts to boost cash for the NHS, after the prime minister’s announcement last month that the crisis-hit health service will receive an extra £20bn per year by 2023.

Fuel duty has been kept at a rate of 57.95p per litre (for petrol and diesel) since 2011, despite several proposed hikes throughout George Osborne’s tenure as chancellor.

AA spokesperson Luke Bosdet said increasing fuel duty has “become a huge red line that politicians cross at their peril”.

More than a quarter of AA members spend a set amount on fuel when they visit a petrol station, rising to 40 per cent among the less well-off, mainly because “they don’t have the slack in their personal or family budgets to be able to absorb an increase in fuel costs”, Mr Bosdet said.

“When the impact of a sudden, government-invoked hike in fuel costs becomes so knife-edged, a backlash is inevitable.”

The RAC noted that the proposed tax hike comes as drivers already face increased costs, as weaker sterling makes it more expensive for firms to buy fuel, compounded by the fact that oil prices have been on an upward trajectory since the beginning of the year.

A spokesperson for the group said: “Aside from the fact that petrol and diesel in the UK are subject to some of the highest levels of taxation anywhere in Europe, it is also the case that the fuels are at their highest prices for more than three years.

“With a significantly weaker pound, it would only take a few further oil prices rises this year to see prices start to rocket.”

The proposals also provoked ire in political circles. Tory MP and former minister Robert Halfon said that the fuel plans would go down “like a bucket of cold sick”, as hard working families and businesses were likely to be hit hardest.

He told The Independent: “I was horrified to see the story, if it is true, as it would have a huge impact on not just motorists but businesses too.

“The price of fuel has gone up hugely already. I think 15p for diesel and 13p for for petrol. I think it would be entirely the wrong thing to be putting up fuel duty.

“People think it if you have a car then you are wealthy, but that is not the case. This will hit people in rural areas without good transport links.”

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