Fuel Duty and the cost of motoring
8th May 2012
Record oil prices driving up the cost of fuel at the petrol pump are making life hard for families and businesses – especially smaller businesses or those, such as haulage firms, that use cars and lorries more than average.
The Government accepts that this is a huge problem, which is why, despite the unprecedented financial constraints the Government is operating within, it has taken action in the last Budget and Autumn Statement to help by:
- cutting Fuel Duty by 1 pence per litre last year;
- introducing a new Fair Fuel Stabiliser that ensures North Sea oil companies contribute more when oil prices are high;
- freezing Fuel Duty until August this year; and
- scrapping altogether a planned Fuel Duty rise due in the summer inherited from the last Government.
This represents a £4.5 billion support package for motorists from 2011-2013. As a result of these measures, fuel prices will be 10 pence per litre lower as of April 2012 than they would have been under Labour’s plans. Indeed, by the end of this year, the action Ministers have taken means families will save £144 on filling up the average family car.
I know that this reduction in fuel duty - while very welcome - has not ended the pressure on family budgets or local businesses. However, all these steps are certainly a move in the right direction, especially given the effort that has had to be made in order to fund them while also tackling the budget deficit.