Budget 2015: Fuel duty remains frozen

Published 18 March 2015

Chancellor of the Exchequer George Osborne has announced that fuel duty will remain frozen at 57.95 pence-per-litre.

Fuel duty has not increased since 2011, when Labour’s fuel duty escalator was scrapped. The Government collected almost £27bn in taxes from fuel over 2014-2015.

Campaign group FairFuelUK doesn’t think a fuel duty freeze is sufficient, however, and has called for a reduction of three pence-per-litre.

Quentin Willson, Lead Campaigner for FairFuelUK said: "With The Treasury, Bank of England, CEBR and NIESR all confirming that low road fuel costs significantly benefit the economy, uplift GDP and increase consumer spending, it’s time to reassure the electorate that the Government will continue to keep fuel duty as low as possible."

Fuel prices took a nosedive in early 2015, but have since started to increase.

Fuel prices took a nosedive in early 2015, but have since started to increase. The average price of petrol is currently 112 pence-per-litre, while diesel costs 118.3 pence-per-litre.

That is still down significantly on last year. In July 2014 the average price of petrol was 131.6 pence-per-litre, while diesel cost 136.1 pence-per-litre.

The latest Ford Mondeo 1.6 EcoBoost would cost £1045 a year to fuel based on official economy figures and current petrol prices, down from £1228 a year based on July 2014 prices.

A fuel duty cut of 3 pence-per-litre would cut petrol prices to 109 pence-per-litre on average, bringing the annual fuel bill down to £1017.

RAC chief engineer David Bizley said: “Mr Osborne has clearly taken an opportunity to maintain the truce in the “war on motorists” whilst tying the hands of any new incumbent of No 11. Freezing fuel duty beyond the end of this Parliament is therefore a very shrewd move as it would be extremely unpopular for any future Chancellor to unfreeze it.

“Private motorists and businesses have benefitted considerably through both a cut and freeze in fuel duty in Mr Osborne’s time as chancellor. What we need now is a firm commitment from all political parties ahead of the election not to reverse his decision as soon as they take office as this would be a retrograde, harmful step that will lead to an increase in both household and business costs and dampen economic growth.

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