Chancellor could act to reduce household bills caused by record oil prices
The Chancellor should consider cutting the level of fuel duty if pump prices continue to rise, the RAC Foundation has suggested.
With oil prices having been driven higher by the Russian invasion of Ukraine the cost of filling up has hit new highs.
The Press Association reports data from Experian Catalist showing that on Sunday the average price of petrol in the UK was now 163.5p per litre whilst diesel was 173.4p.
The Irish government has already moved to shield consumers from the worst of the price rises there with a cut of 20 cents per litre on petrol and 15 cents per litre on diesel which will be in place until the end of August.
Also, a growing number of people are signing a UK petition calling for fuel duty and VAT on fuel to be reduced by 40% for two years.
More than 62,000 people have signed the petition on the UK Government and Parliament website.
Steve Gooding, director of the RAC Foundation, said:
“If the Chancellor is looking for ways to help with soaring household bills then an obvious option would be to follow the example set in Ireland and cut the rate of fuel duty to ease the burden of soaring pump prices.
“That would directly benefit the three quarters or so of households that run a car and indirectly help us all by reducing the rising fuel cost pressure on businesses and hauliers that will otherwise inevitably make its way to higher prices on the shelves for consumers.
“Over recent weeks the Chancellor’s tax take from drivers will have risen because VAT is levied as a percentage of the pump price of fuel – including the duty element – so it is not unreasonable to suggest he gives something back whilst domestic budgets are being squeezed so hard.”
Whilst the price of a barrel of Brent crude oil has fallen back in recent days there is an expectation that pump prices will rise further because what is happening in the oil market takes one or two weeks to be reflected on forecourts.
Oil is still trading at more than $100 a barrel, a level not seen since 2014.
ENDS
Contact:
Philip Gomm – Head of External Communications – RAC Foundation
07711 776448 | [email protected]
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.
The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist. All the Foundation’s work is available at:www.racfoundation.org