Fuel gets cheaper
Fuel prices have rocketed of late, I remember when I first started driving ten years ago I use to fill up my little Clio for 79p per litre of unleaded, this has now risen to £1.31p per litre. To help ease the squeeze on motorists the chancellor George Osborne has cut the fuel duty by 1p. The fuel duty before the cut was 59p a litre, this went down to 58p a litre from March the 23rd.
There was even better news for motorists as the chancellor announced that the fuel duty escalator that adds 1p to fuel duty on top of inflation every year will be scrapped for the rest of this Parliament.
George Osborne introduced a Fair Fuel Stabiliser to protect motorists from bearing the brunt of oil price increases at petrol stations. He said it would fund this through raising the supplementary charge on North Sea oil and gas production from 20% to 32% as of March.
Under the Fair Fuel Stabiliser system when oil prices are high, fuel duty will rise by Retail Price Index only. But if the oil price dips below a set trigger price, likely to be $75 (£46) per barrel, the Government will increase fuel duty by RPI plus 1p per litre in each such year. It is unlike that the cost of fuel will drop to $75 a barrel soon, so for the moment the government’s 1p reduction in duty is welcome by personal and business car drivers.
The AA and a van dealership selling commercial vehicles in Sevenoaks welcomed this cut in fuel duty, the AA president Edmund King said: “This action has probably stopped a ‘summer of discontent’ and is a common sense move. Any increase in duty would have bled many drivers on low incomes dry so this action offers short-term first aid.”
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