The UK government will freeze the fuel duty rate for the coming year, Chancellor Rishi Sunak has announced in the 2021 Budget.
Fuel duty has been frozen at 57.95p per litre since 2009, but reports suggest Sunak was considering an increase for this year, both to raise public funds and send a signal about the government’s commitment to lowering carbon emissions.
But Sunak has decided that the public’s reliance on cars for transport during the Covid-19 pandemic, when the need to socially distance has deterred many from public transport, means that fuel duty should not be increase.
“To keep the cost of living low I’m not prepared to increase the cost of a tank of fuel, so the scheduled rise in fuel duty is cancelled,” said Sunak, during the presentation of the Budget.
Brian Madderson, the chairman of the Petrol Retailers Association, backed the move, saying: “As the PRA has campaigned heavily against any rises in fuel duty, we naturally welcome the Chancellors decision today. Fuel duty is a regressive tax on business and livelihoods so any attempt to increase it would have been entirely counter-productive as the economy gets back on track.”
Madderson’s views were echoed by RAC head of policy Nicholas Lyes, who said: “Drivers will breathe a sigh of relieve that the Chancellor has decided not to ‘rock the fuel duty boat’. We feared this would only pile further misery on drivers at a time when pump prices are on the rise and many household incomes are being squeezed as a result of the pandemic.
“Many drivers see their cars as a safe way to carry out essential journeys and believe having access to a vehicle is even more important as a result of the pandemic. If the Chancellor had raised fuel duty, he could have risked choking any economic recovery as it would have led to increased costs for consumers and businesses.”
More news to follow.