UK fuel duty frozen

Fuel duty was frozen for the sixth year in a row in the latest UK Budget unveiled on 16 March 2016. The main rate of fuel duty remained set at 57.95 p/l for 2016–2017, marking the longest fuel duty freeze for 40 years.

UK Chancellor George Osborne noted the average driver will save around £75 every year in duty compared to pre-2010 fuel duty escalator plans. Given current low crude prices, the Treasury estimates that pump prices are now 18 p/l lower than if the government had maintained pre-2010 fuel duty escalator plans.

Quentin Wilson of FairfuelUK remarked: ‘Freezing duty for a sixth year is hugely significant … and has helped improve GDP, economic activity and tax receipts.’

Meanwhile, The Petroleum Retailers Association (PRA) Chairman Brian Madderson also welcomed the announcement, which the PRA has calculated saves £75 a year on average for the consumer and £250 for businesses. However, he was disappointed that the opportunity was missed to tax unregulated hand car washes.

Both the AA and the RAC had also lobbied strongly for the Treasury to avoid hiking fuel duty. Steve Gooding, Director of the RAC Foundation, said: ‘Transport is the biggest area of household expenditure bar none, but 38 million (UK) drivers will be relieved it didn’t just get bigger still. The Chancellor will hardly be out of pocket. As it stands, tax on petrol and diesel still accounts for about 75% of the pump price and Mr Osborne remains on course to collect more than £27bn in fuel duty alone next year.’

For more information on UK fuel pricing and market trends and developments across the UK fuel retailing sector, see Petroleum Review’s annual Retail Marketing Survey, published this month.

Source: RAC