Budget 2021: Sunak scraps rise in fuel duty
The chancellor is cancelling the planned rise in fuel duty.
Speaking at the Budget, Rishi Sunak said he is “not prepared to add to the squeeze on families and small businesses”.
Prices at the pumps reached record levels of 142.94p a litre on Sunday.
The new record is 28p a litre higher than a year ago, when petrol cost about 114.5p a litre.
Sunak said the cancelled price hike amounts to a saving over the next five years of nearly £8bn.
This is the 12th consecutive year of frozen rates.
Compared to pre-2010 plans, Wednesday’s announced freeze means the average tank of fuel will cost £15 less per car, £30 less for vans and £130 for HGBs.
The fuel duty freeze will be controversial ahead of the COP26 climate conference later this month, with the government committed to 2050 net-zero carbon emission plans.
Nevertheless, the move will provide relief to road users and has been praised by motoring group RAC.
RAC fuel spokesman Simon Williams said, “We welcome the Chancellor’s confirmation that duty will continue to remain frozen at 57.95p a litre. With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt.”
If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p taking the cost of a tank to over £80, and diesel an eye-watering 150p.
FairFuelUK also supported Sunak ditching the fuel duty plans.
It said, “FairFuelUK warmly welcomes freezing Fuel Duty for the 12th year. FairFuelUK unashamedly takes some of the campaigning credit for the longest period of any UK excise levy being capped. This is great news and some relief for hard pressed drivers.”
Both groups also offered separate criticisms of the chancellor.
RAC were “disappointed” that VAT was not cut to reduce prices at the pumps, while FairFuelUK wanted the government to cut fuel duty and ‘incentivise drivers to move to cleaner fuels’.