The chancellor of the exchequer has addressed spiralling fuel costs for motorists by cutting 5p a litre in fuel duty, reducing the government tax take to 53p a litre.
Rishi Sunak declared the determine represents the biggest cut ever in fuel duty, as well as states the cut will be in location up until March 2023. The expense to the treasury will be £5bn, he said, which will be passed to drivers in cost savings at the pump.
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The AA is one of the bodies welcoming the cut in duty, however has increased concerns that the cost savings will not be passed on to drivers at the pumps. “Average pump costs yesterday hit new records, in spite of the autumn in wholesale costs”, noted AA spokesperson Edmund King.
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The RAC states its calculations show a 5p cut in fuel duty – taking it from 57.95p per litre down to 52.95p – will shave around £3 off the expense of filling a 55-litre household car. It favoured a 5 per cut to VAT instead, bringing the rate down to 15 per cent from the present 20 percent which would have seen cost savings of £4 on the expense of filling a household car.
RAC head of policy Nicholas Lyes called the 5p cut in duty “a decrease in the ocean”, stating the determine takes costs back only to where they were a week ago, as well as that drivers will only notice any type of cost cuts when filling stations have bought fuel at the lower rate. Lyes likewise increased fears that retailers may select to take in a few of the duty cut as well as not pass it on to customers.