Reduction in fuel duty – the impact for drivers
The Chancellor George Osborne recently announced the government’s 2011 budget and many motorists where waiting in anticipation to see whether the previously planned hike in fuel duty would take place. Instead they got a reduction of 1p but to many drivers’ dismay this reduction in duty does not seem to have had any effect on the fuel prices on the nation’s forecourts.
Newspapers up and down the country are reporting that many local garages seem to have raised their prices in advance of this surprising instant reduction in duel duty of 1p per litre. Petrol retailers have responded and said that the prices they pay for fuel have been rising but customers are obviously quite suspicious.
The political instability in the oil producing countries of the Middle East and North Africa has been putting an upward pressure on the price of oil and the average price of fuel on the forecourt has been steadily rising the last month or so.
Some garages have not yet reduced their prices by a penny and say they won’t do so until the 1 April because they buy their stock with duty paid. If they reduce their prices with a penny before they buy new stock, this will leave them out of pocket.
In summary, the 1p decrease in duty will probably have little effect on what consumers pay for a litre of fuel, whether they drive a old diesel Land Rover Discovery or a new Vauxhall. The instability in part of the oil producing world will most likely void any small measures the government introduces.
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