Fuel duty increase would be 'madness' says expert
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Car tax updates which would have seen fuel duty increased by as much as five pence per litre for petrol and diesel owners is thought to have been scrapped by Chancellor Rishi Suank ahead of Wednesday’s Spring Budget. Treasury sources said Mr Sunak was considering the charge but drivers were relying on their cars too much during the pandemic.
Instead, the Government has confirmed its E10 fuel programme will go ahead from September.
This will see cleaner fuel introduced across petrol stations which could save up to 750,000 tonnes of CO2 each year.
However, FairFuelUK founder Howard Cox has wanted the sudden change in direction was confusing and sending motorists “mixed messages”.
He warned it was likely road users would still be “punished in the pocket” due to the changes as E10 fuel is more expensive.
He said: “For weeks MPs have been told by the Treasury that one of [the] reasons fuel duty hikes are needed is to push people towards electric and eco vehicles.
“But now the Department for Transport are championing new fuel that will supposedly cut emissions without the need to update their car.
“Not only are drivers being hit with mixed messages, but they will be punished in the pocket too.
“Hiking fuel duty hits lower-income drivers the most, and the Treasury should not hide behind the green lobby as an excuse to swell their coffers.”
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The move to E10 fuel is expected to add around 1.6 percent to drivers’ fuel costs because the new petrol is less efficient.
This means drivers will have to pay more for fuel to achieve a similar mileage rate.
AA President Edmund King said the added fuel charge would anger motorists but may be part of the reason why fuel duty does not have to be increased.
He said: “That will rub many drivers the wrong way.
“But the AA expects the Chancellor, who will get more fuel duty from more fuel consumed, will not have to increase fuel duty in the Budget next week.
Fuel duty has been frozen at 57.95p since 2011 when increases were originally stopped.
The Treasury has previously claimed drivers have saved over £1,200 since the freeze was introduced.
FairFuel estimated a two pence per litre rise in fuel duty could boost revenues by up to £490million in the short term.
However, revenues would fall as more drivers made the switch to fully-electric cars over the next decade.
This would see overall revenue, from a two pence rise, drop to just around £50million by 2040.
A Treasury spokesperson said: “More people are still using cars as safer mode of transport.”
“And there is a massive cost to electric vehicles at the moment – that feels like the priority to address.”
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