A motoring body has warned that if Fuel Duty isn’t kept in the Budget, motorists will face higher costs. Conflicts in the Middle East could also have an impact on global oil prices
Petrol prices are currently at their lowest this year – but there are fears this could rise following the upcoming Budget.
The AA have reported that more than 11 weeks of falling pump prices have ground to a halt this week, after 11.6p has come off the average cost of a litre of petrol. That has cut £6.38 off the cost of filling the typical 55-litre car fuel tank.
Petrol started to fall from an average of 145.3p a litre in the third week of July. It reached 133.7p over the weekend and has stuck at that level so far this week – their lowest this year. Diesel has meanwhile dropped from 150.5p to 138.4p a litre in the same period.
But the AA have warned that any potential increase in fuel duty announced in the upcoming Budget could push prices up quickly. Escalating conflicts in the Middle East could also have an impact on global oil prices.
Without the 5p fuel duty cut (6p with VAT) current average petrol pump prices would be less than 3p a litre off the pre-pandemic record high of 142.48p, from April 2012. Peaks this year hit 150.1p for petrol and 158.3p with diesel, both in April.
Fuel duty has been frozen for more than a decade. In 2022, the then Conservative chancellor Rishi Sunak cut it by 5p per litre and that was extended until March next year. Labour are expected to scrap the duty cut.
Edmund King, the AA’s president, said: “More than three years of relentless pump-price trauma has left motorists feeling that whatever comes down quickly shoots up. An unwelcome fuel duty hike on October 30 would certainly do that.”
Mr King said scrapping the 5p cut in fuel duty would hurt everyone, not just drivers. He added: “Everything from the price of food in supermarkets to the delivery of social care within our communities is impacted by pump prices, and an unnecessary hike in fuel duty could make things worse.
“As well as being ‘the voice of the motorist’, The AA understands the wider impact any rise in fuel duty has on the wider economy. “Household budgets are already stretched and everyone benefits from a temporary suppression of fuel duty. Even households without a car feel the benefit of discounted fuel duty through cheaper bus fares and more affordable goods from supermarkets.”
The AA said while it does not deny there are tough choices for Chancellor Rachel Reeves to make in October, it fears hiking fuel duty could backfire on working people and fuel inflation.
Mr King added: “The recent National Travel Survey shows that, outside of London, 70% commute by car to work and this increases to 81% in rural areas. The car remains an essential form of mobility and affordable road transport is essential to the health of the nation.”
