Fuel campaigners have warned fuel duty rates may increase for motorists after figures revealed a slump in sales have cost the Treasury billions. Instead campaigners at FairFuel UK have pushed for a further cut in VAT and fuel duty which they claim will help stimulate growth.
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Posting on Twitter, Fair Fuel director Howard Cox said: “@RishiSunak, resist increasing tax on hard working drivers.
“Get economy motoring with a cut in VAT and fuel duty. Put money back into all our pockets.
“The lockdown decline in fuel duty revenue is temporary, stimulating growth is permanent.”
Analysis from HM Revenue and Customs shows a collapse in car use during the lockdown has cost the Treasury almost £2.6billion.
Figures show just £4.1billion was collected in fuel duty costs between March and May 2020 compared to £6.6illion during the same period last year.
Data revealed fuel consumption was also dramatically lower than 2019 with just 7.7billion tonnes leaving forecourts.
This was compared to 11.4billion last year in a staggering 3.7billion decline due to the coronavirus pandemic.
AA President Edmund King warned trips were up to 80 percent lower during the early stages of lockdown with traffic levels still lower even after restrictions have been eased.
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He described the figures as “startling” and claimed the data revealed how much the government relied on driving fines for their income.
Mr King said: ““These startling figures show that the collapse in car use is costing the Treasury billions.
“The AA’s tracking of car trips since March 23 showed a fall of up to 80 percent of trips in the early weeks of lockdown.
“Even though traffic has increased in recent weeks it is still much lower, particularly in the evenings and weekends, which is also reflected in our breakdown figures.
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“These new statistics illustrate just how much central and local government rely on tax, parking charges and fines from car owners to support public finances.”
Earlier this year the Office for Budget Responsibility revealed how significant fuel duties were to the government’s finances.
Their analysis predicted fuel duty would raise an estimated £28.4billion between 2019 and 2020 which would equate to £1,000 per household.
However there are fears among campaigners that the sudden decline in revenue could push the Chancellor to raise fuel duty charges.
This currently stands 57.95p per litre and is a fixed price for petrol, diesel and bioethanol fuels.
The Chancellor decided to freeze fuel duty charges for the tenth year in a row during his budget statement in March.
Mr Sunak said although he was mindful of the fiscal and environmental impacts of keeping the rate at 57.95p, he conceded people did rely on their cars.
The Treasury revealed freezing fuel duty for a further year would have saved the average car driver a massive £1,200 since 2010.
However, before the budget there were fears the government may have been set to increase fuel duty charges by around two pence per litre to 59.95p.
A small increase in fuel duty price would raise an extra £4billion of funding for the Treasury which could be needed after the true cost of the coronavirus pandemic is known.
Increasing the fuel duty charges would also help the government’s bid to meet its zero carbon target by 2050.
The increased fuel cost is thought to encourage more road users to ditch their polluting vehicles and switch to an electric car.
Proposals for a 2020 budget rise were capped after opposition from several Conservative MPs in fear of alienating the electorate who backed the party in the December 2019 election.
Boris Johnson had confirmed in his manifesto that fuel duty would be frozen for a tenth year.
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