Petrol prices to rise if Rachel Reeves scraps fuel duty freeze | UK | News
Petrol prices could rocket if Rachel Reeves decides to scrap the freeze on fuel duty in next week’s Autumn Budget. Fuel could rise to as much as 142p per litre if the freeze is ended by the Chancellor, the AA warned.
Fuel duty has been frozen since 2011, and an additional 5p per litre was knocked off prices in 2022 to help curtail runaway oil costs from hitting consumers so hard after Russia‘s invasion of Ukraine. Removing the freeze could raise £2.6billion for the public purse, a much-needed offering to the estimated £20 to £30billion black hole in spending Ms Reeves needs to fill. If the 5p per litre cut to fuel duty expires, it could cost households £7.3billion by 2029. The AA said this 5p cut is preventing prices at the pump from spiralling out of control to the worst levels drivers have seen since before Covid and the Ukraine war hit the market.
The motoring group said that removing this cut would see prices for petrol rise to 142.2p and 150.6 for diesel. The figure for petrol is not as high as the all-time historic record of 191.4p per litre in July 2022, according to RAC figures, but it’s a significant jump from current prices of 135.6p. The all-time highest price for diesel was also in July 2022 at 199.1p per litre.
Road Haulage Association (RHA) Director of Public Affairs and Policy, David Boot, said: “We repeat our call on Chancellor Reeves to keep the freeze”. He added: “We’ve repeatedly warned that a fuel duty increase won’t just impact businesses and motorists – it will directly hit households across the country. It impacts how we move goods, feed families and keep the economy running.”
RHA managing director, Richard Smith, added that a rise in fuel prices will not just hit motorists, but “they flow through the supply chain. This means households pay more for the weekly shop and energy bills. The essentials are hit hardest, and lower-income families feel it most.”
He said that industries like freight transport would be directly affected too. He said:”Diesel costs more here than anywhere else in Europe, and over half of every pound at the pump already goes to Government. Road freight transport firms keep shops stocked and building sites running, but they’ve been squeezed in recent years. A fuel duty increase would be a hammer blow to a key industry already operating on tight margins.”
