What the fuel duty freeze means for forecourts
Theresa May has announced that fuel duty, a tax that applies to every litre of fuel sold on UK forecourts, is to remain frozen.
The UK PM has recently said that a car is a necessity and “not a luxury” for millions of people, echoing recent RAC research that indicates drivers’ dependency on the car is actually increasing.
The announcement, which follows campaigning by the RAC and other organisations, comes on the day new data from RAC Fuel Watch shows that the price of diesel has climbed to its highest point since 2014, and with the threat of further petrol and diesel price rises to come.
It now costs nearly £72 to fill a family-sized car that runs on unleaded, and nearly £74 to top up a similar-sized diesel car.
Reacting to the decision to continue the fuel duty freeze, RAC fuel spokesperson Simon Williams said that he was pleased the Prime Minister had listened to the views of motorists but warned that, “darker clouds in the form of higher wholesale costs may well be passed on to drivers at the pumps imminently.”
The price of a barrel of oil has recently broken through the $85 mark, with the pound also weakening against the dollar. These two factors have the potential to spell further pump price increases in the weeks ahead.
What does this mean for the forecourts?
Simon continued: “Petrol drivers will be hoping that September was the month that stopped the rot in terms of rising pump prices, but this may well not be the case… oil is at a four-year high and there is lots of volatility in the exchange rate due to the increasing tension of the Brexit negotiations.”
Fuel duty was due to rise from April 2019, but as a result of today’s announcement drivers should be protected from rises until April 2020 – although changing the rate of fuel duty is something that is ultimately in the Chancellor’s power.
Simon Williams said: “Motorists can breathe a sigh of relief, for now, however, it is a shame that each year motorists have to worry whether the Government is about to hit them harder in their pockets.”