Petrol Prices

Fuel Duty Freeze

During the Conservative Party Conference, chancellor George Osborne pledged that he would freeze fuel duty until 2015.

He said, in part: “Provided we can find the savings to pay for it, I want to freeze fuel duty for the rest of this Parliament… Conservatives don’t just talk about being on the side of hard-working people. We show it day in day out in the policies we deliver.”

Petrol Prices

The Petrol Retailers’ Association (PRA) welcomes the announcement that Chancellor George Osborne MP pledged to freeze fuel duty until the next election in May 2015, meaning that the planned duty rise of 2 pence per litre in September 2014 is unlikely to go ahead.

Brian Madderson, Chairman of the Petrol Retailers Association said: “The PRA has been lobbying Government and the Treasury to make an early announcement about their intentions on freezing fuel duty, so it is welcoming news to hear the Chancellor’s commitment. It will be the longest period of duty freeze (4 years, 4 months), in over 40 years if the announcement goes ahead as planned.”

“Although this is a step in the right direction, it is disappointing that the announcement was dampened with a comment by George Osborne saying, ‘provided we can find the savings to pay for it’. The PRA will continue to liaise with government and we hope to see further developments in due course”

The Road Haulage Association has weighed in with its own perspective on the matter. A spokesman said: “The Road Haulage Association acknowledges the Chancellor’s commitment to freeze the level of fuel duty for the duration of this Parliament, provided that the available money could be found.

The first point made by the RHA in its pre-Budget submission in February this year was to request “a commitment to no further increase in diesel duty this Parliament. The Chancellor’s speech will be seen as all-but granting that request.”

RHA policy director Jack Semple added: “Haulage firms will take on board the Chancellor’s pledge not to increase on this tax on the UK supply chain and will develop their business plans accordingly,” said RHA director of policy Jack Semple.

“We should remember that UK fuel duty is still by far the highest anywhere in the EU. The Chancellor should take the bold step to cut duty, which, as has been demonstrated by independent research commissioned by the RHA for the FairFuelUK Campaign, would boost growth and create jobs.”

And as one would expect other motoring organisations added their thoughts to the news, including the RAC, who want the chancellor to go even further to help Britain’s hard-working and hard-pressed motorists.

RAC technical director David Bizley said: “The Chancellor’s intention to extend the freeze on fuel duty is welcome, but it’s time for the Government to consider a more radical overhaul of the motoring taxation regime so that fuel poverty becomes a distant memory for those in our society with low income but still have a high dependence on their vehicles.”

“There is, in fact, good evidence that the Treasury coffers would benefit more if he were to reverse the trend and cut fuel duty for struggling motorists.

“Year on year, receipts from petrol and diesel have begun to slowly decline since 2010 when the coalition was formed. Combined petrol and diesel consumption has fallen 6.6% from 48.3bn litres in 2008 to 45.1bn litres in 2012 while fuel duty revenue actually increased by £2bn (£24.1bn to £26.1bn – an 8% increase) due to duty increases of more than 7p a litre in that period.”

“The numbers are a clear illustration of the dilemma in which the Government finds itself. The recession has taken its toll over the last five years and this, combined with motorists driving more fuel efficient, environmentally-friendly vehicles means that Government would need to increase fuel duty at above the rate of inflation, just to maintain tax revenues from fuel.

“Many motorists are suffering genuine hardship as a result of the cost of fuel for essential journeys to the shops, to work and to support their families so fuel duty can no longer be treated by the Treasury as a cash cow.”

Of course, the announcement of the freeze does rely on some government spending savings being effected, so only time will tell if he can pull the prize freeze off. But from the motorist’s perspective, let’s hope he can!

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