The UK government has announced a five-pence per liter fuel tax reduction to mitigate the effects of the rising cost of living.
Chancellor Rishi Sunak revealed the change during the government’s annual spring statement on Wednesday. The cut will start from 6 p.m. tonight and will run for 12 months until March 2023.
It is hoped the reduction will support drivers as fuel continues to fetch high prices. This is partly due to Russia’s invasion of Ukraine, which drove up the price of oil.
Fuel prices have repeatedly hit record highs in recent months. Latest figures from data firm Experian Catalist showed the average price per liter of petrol was 167.3p on Tuesday, while diesel was 179.7p.
“The Chancellor has come to the aid of British families and businesses who use their vehicles not for pleasure but to function in their daily lives,” the AA chairman said. Edmund King.
“Since the beginning of the year, soaring prices at the pump of 20 cents a liter have been the shock that has shaken the finances of families and in particular young drivers, retirees and low-income workers who must move every day.”
Although it welcomed the reduction, the AA suggested it wouldn’t go far enough unless the forecourts adjusted their prices accordingly.
He also noted that 43% of drivers reduce their car use, compared to around 59% of young drivers and 53% of low-income people.
“We’re concerned the advantage will be lost unless retailers pass it on and reflect a fair price at the pump,” King said. “Average pump prices hit new records yesterday, despite lower wholesale prices.
“Above the [fuel] reduction in tariffs, there has been a substantial reduction in the wholesale costs of road fuel supplying the forecourts since March 9. This should also lead to lower prices at the pump.
“The road fuel trade shouldn’t let the Treasury do the heavy lifting when it comes to cutting auto costs.”
The RAC also welcomed the 5p cut, but said it would only ‘take prices back to where they were a week ago’, calling it a ‘drop in the ocean’.
“With the reduction taking effect at 6 p.m. tonight, drivers will only notice the difference at the pump once retailers have purchased new fuel at a lower rate,” said RAC policy officer Nicholas Lyes.
“There is also a very real risk that retailers could simply absorb some or all of the tariffs themselves by not lowering their prices. If this turns out to be the case, it will be disastrous for drivers. It wouldn’t be entirely unexpected either, given that the biggest retailers didn’t cut prices late last year when the price of oil fell sharply.
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This notice was published: 2022-03-23 13:40:56