AA demands freeze on fuel duty

The AA is calling for the Government to continue the freeze in fuel duty – in contrast to rival breakdown firm the RAC, which last week said the Chancellor ‘may as well raise it’.

The call was part of the AA’s Motoring Manifesto, which was sent to all parties before this year’s General Election.

It states that scrapping the 5p freeze in fuel duty would hurt everyone, not just drivers,.

"Everything from the price of food in supermarkets to the delivery of social care within our communities are impacted by pump prices and an unnecessary hike in fuel duty could make things worse," says AA president Edmund King.

The AA says that with household budgets already stretched, everyone benefits from a temporary suppression in fuel duty and then even households without a car feel the benefit through cheaper bus fares and more affordable goods from supermarkets.

Backing up the AA’s call is research from East Anglia University, that shows less well-off households are spending as much as 20% to 30% more of their disposable income on petrol than other households.

A 5p increase in fuel duty would, according to HMRC data, switch more than £2.3bn from potential consumer spending to the Treasury.

The RAC said it would normally be against any increase in duty, but claims it has long been saying drivers haven’t been benefitting from the current discount, due to much higher-than-average retailer margins.

"Much has been made of the margin of fuel retailers and while there are examples of some outlets collecting higher than necessary profits, most small and independent forecourts are struggling to keep their heads above water," says King.

He says he doesn’t deny there are tough choices for the Chancellor to make in October, but hiking duel duty could backfire.

"Outside of London, 70% commute by car to work and this increases to 81% in rural areas. The car remains an essential form of mobility and affordable road transport is essential to the health of the nation."