Chancellor ‘may as well raise fuel duty’ – but filling stations hit back
Tue, 03 Sept 2024
The RAC has surprisingly concluded the Chancellor has no choice but to end the temporary 5p a litre cut in fuel duty – and may as well do so as filling station operators aren’t passing it on to customers anyway.
However, filling station operators have slammed the move, with one telling trade title Forecourt Trader it was "madness".
The current cut in fuel duty, introduced following Russia’s invasion of Ukraine, is costing the Treasury £2bn a year, explained RAC head of policy Simon Williams.
However, according to a recent report by the Competitions and Markets Authority, drivers were overcharged by a staggering £1.6bn last year.
The RAC says it would normally be against any increase in duty, but claims it has long been saying drivers haven’t been benefitting from the current discount due to much higher-than-average retailer margins.
As more EVs come onto UK roads, the Government will need to tax drivers differently says the RAC. It believes replacing fuel duty with a pay-per-mile system as soon as possible is the only way forward.
It claims that because the only tax levied on fuel would be VAT, this would give retailers nowhere to hide.
Fuel retailers have hit back, with one telling Forecourt Trader that the RAC are more interested in picking a fight with the fuel industry than seeing consumers get the best deal.
Another said that if they increase fuel duty by 5p per litre, then some time in the days after, prices will increase by 5p per litre.
Gordon Balmer, executive director at the Petrol Retailers Association, insisted that retailers are working hard to keep fuel prices as low as possible in a fiercely competitive market.
"Any Government-driven increases at the pump would raise costs for both businesses and motorists, further fuelling inflation. We hope the Chancellor will protect motorists by running out unnecessary increases to fuel prices," he says.
Any statement on fuel duty is likely to come in the autumn Budget on 30 October 2024.
Why is BP fuel so expensive?
