Rise revealed in Office for Budget Responsibility documents
There could be a 23% rise in fuel duty next March, the Office for Budget Responsibility (OBR) appears to be suggesting.
In its Economic and Fiscal Outlook, published alongside the Chancellor’s Autumn Statement, the OBR warns that a rise in fuel duty is a “particular risk” to its forecast. It says:
“The planned 23 per cent increase in the fuel duty rate in late-March 2023, which adds £5.7 billon to receipts next year. This would be a record cash increase, and the first time any Government has raised fuel duty rates in cash terms since 1 January 2011. It is expected to raise the price of petrol and diesel by around 12 pence a litre.”
If the move was to go through then the current rate of fuel duty – cut from to 57.95p per litre to 52.95p per litre in March 2022 because of the war in Ukraine – would rise to about 65p. When VAT is added to this, the change would mean the pump prices of both petrol and diesel by about 15p per litre.
Speaking to the Press Association a Treasury spokesperson did not deny the proposal was under consideration but said nothing was decided:
“This is a provisional figure based on forecasts that are subject to change. The existing 5p cut will remain in place until March 2023 (a tax cut which is worth £2.4bn) and final decision on fuel duty rates will be made at the Spring Budget.”
Steve Gooding, director of the RAC Foundation, said
“Perhaps the Chancellor thought his statement contained as many of his ‘difficult decisions’ as we could stomach in one hit, but now we learn that a substantial hike in fuel duty may be round the corner amounting to 15p per litre when VAT is added on top. No wonder he didn’t mention it.
“Although this doesn’t constitute a commitment, the very fact that ministers are contemplating such an increase will cause consternation amongst millions of drivers and businesses.
“Unless the Chancellor’s crystal ball is predicting a significant fall in the barrel price of oil one has to wonder how such an increase would help with the squeeze on household budgets and the desire to stimulate rather than stifle growth.”
Philip Gomm – Head of External Communications – RAC Foundation
[email protected] | 07711 776448
Notes to editors:
The RAC Foundation is a transport policy and research organisation that explores the economic, mobility, safety and environmental issues relating to roads and their users.
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