In last night’s spring statement the Chancellor Rishi Sunak announced a lot of plans to help the UK population weather the looming cost of living crisis one of which was a cut in the fuel duty we pay at the pump.
What is Fuel Duty?
Fuel duty is a tax that’s applied specifically to fossil fuels used specifically for transportation. In the UK this is applied to petrol and diesel that is used in cars, vans and HGVs as fuel used for agricultural vehicles (primarily red diesel) and heating is calculated differently.
The amount that drivers pay for fuel duty varies between countries as it is set by the government in that country and is paid to them as it is a tax. In the UK fuel duty is
In his statement on Wednesday, Rishi Sunak said that fuel duty will be dropped by 5p per litre from 57.95p per litre down to 52.97p per litre. This is the first reduction in fuel duty since 2011.
It is expected that the drop in fuel duty will help lower the rapidly rising cost of petrol and diesel, which has seen record prices across the country due to the Ukrainian conflict and uncertainty stemming from it.
Although we will see a drop in the prices at the petrol pump a spokesperson for the RAC said that this will be a drop in the ocean of the rising costs, with the cut in fuel duty taking us back to the prices of last week rather than the more substantial cuts that drivers were hoping for.
The RAC, along with many others, has argued that cutting VAT on fuel would be a more beneficial change for drivers and offer them greater savings.
Whilst the chancellor announced the changes effective as of Wednesday evening and MPs are urging retailers to pass the savings onto their customers at the pump you may not see prices drop immediately. This is because retailers will still have to use their current supply, which was purchased prior to the change in fuel duty, and so we might not see a change at the petrol pump until later next week.
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