Motorists Alerted to Potential Fuel Price Increase due to Proposed Autumn Budget Changes

August 28, 2024 TruthUSA

The RAC, an automotive services company, suggested replacing fuel duty with a pay-per-mile system to avoid overcharging drivers.

The RAC warned that British drivers may face higher fuel costs as the government’s October budget is expected to include a rise in fuel duty.

The company cautioned that the fuel duty could increase to 58p per liter soon, following recent remarks by Prime Minister Sir Keir Starmer about public finances.

In his speech, Starmer highlighted a £22 billion gap in public finances and hinted at potential tax hikes in the upcoming Budget in October.

Simon Williams, the RAC’s Head of Policy, stated that the Chancellor might have no choice but to raise fuel duty to 58p per liter in the upcoming Budget.

A previous reduction in fuel duty, initiated in March 2022 and extended by the Conservative government this year, temporarily lowered costs by 5p per liter.

Prior to this reduction, the fuel duty rate had remained frozen at 57.95p per liter since March 2011, in addition to the 20 percent VAT drivers also pay on fuel.

The RAC noted that the Labour government recognizes the loss of revenue from the 5p discount and the overcharging of drivers, as highlighted in the Competition and Markets Authority’s report.

Williams emphasized that retailers need to reduce petrol and diesel prices to reflect lower wholesale costs and to address the excessive retailer margins affecting drivers.

The RAC recommended reducing average petrol prices from 142p per liter to 136p per liter and diesel prices from 147p per liter to 139p per liter.

Furthermore, the company proposed implementing a pay-per-mile system in place of fuel duty to align taxation with the increasing number of electric vehicles on the roads.

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