Fuel Duty Cuts Could Be Scrapped
3rd September 2024
When we asked some of the public, only around 10% knew what fuel duty is.
What Is Fuel Duty?
Fuel Duty is a tax included in the price paid for every litre of petrol, diesel and other fuels using in vehicles or for heating, pumped into a vehicle.
The tax had been frozen for more than a decade under the Conservative government. In 2022, the then Chancellor, Rishi Sunak was forced to address the fuel duty due to the cost-of-living crisis. As a result, Sunak cut the fuel duty by 5p, meaning that both petrol and diesel went from 57.95p-a-litre to 52.95p and extended it until March next year.
The RAC said that the 5p discount is losing the Treasury £2bn a year and they have reached the conclusion that Rachel Reeves has no option but to put fuel duty back up. Prime Minister, Sir Kier Starmer has not refused to rule out a rise in fuel duty in the forthcoming budget, which will be set out on 30th October 2024.
According to latest figures from the RAC, the average price for a litre of unleaded petrol is 140.61p across the UK and 145.35p for diesel and even the AA is opposed to the 5p cut being scrapped. The motoring group said the government already takes 52.95p per litre in fuel duty as well as 20% in VAT.
Did you know?
Combined with Vehicle Excise Duty (VED), the Treasury generates around £35 billion per year from vehicle and fuel taxation. Around 20% of this is spent on road maintenance budgets, with the rest used for general government expenditure.
How do you feel about the potential price rise?