Budget 2021: Fuel duty increase to be SCRAPPED in victory for The Sun's Keep It Down campaign

A PLANNED increase in fuel duty has been scrapped as petrol prices have reached a record high.

In a victory for The Sun's Keep It Down campaign, Chancellor Rishi Sunak has confirmed he will ditch a 2.84p hike in fuel duty that would have heaped more misery on motorists.

Giving today's Budget, Mr Sunak said: "With fuel prices at the highest level in eight years… I’m not prepared to add to the squeeze on families and small businesses. So I can confirm today: the planned rise in fuel duty will be cancelled. That’s a saving over the next five years of nearly £8bn.

"Compared to pre-2010 plans, today’s freeze means the average tank of fuel will cost around £15 less per car; £30 less for vans; £130 less for HGVs. After 12 consecutive years of frozen rates, the average car driver will now save a total of £1,900."

The move comes as prices at the pumps reached an astonishing 142.94p on Sunday, ramping up the cost of the average refuel for drivers.

Rocketing oil prices and a lack of lorry drivers have been blamed for the recent price hikes.

The Budget announcement follows weeks of woe for drivers up and down the country, who have struggled to even get petrol as forecourts ran dry.

The fuel crisis was sparked as a shortage of HGV drivers meant fuel was not being delivered to petrol stations, leaving many pumps empty.

Motorists were forced to queue for miles to fill up their cars, while some forecourts introduced limits to stop people over-fuelling or stockpiling.

The Chancellor's announcement today will be welcome respite to motorists who are already facing spiralling costs.

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The planned fuel duty hike of 2.84p per litre would have added an extra £1.27 to the average cost of filling up a petrol tank.

The widely-loathed levy was due to go up from 57.95p per litre to a hefty 60.79p — potentially costing drivers an extra £66 a year per car.

It comes as some experts have predicted the price of fuel could see reach 150p a litre.

It's a major victory for The Sun’s “Keep It Down” Campaign and is the second time this year fuel duty has been frozen.

On Monday, the Prime Minister's spokesman hinted that the levy would be scrapped, and urged fuel providers to put drivers before profits.

He said: “We recognise rising fuel costs are a challenge for the British public.

“We would always want to see providers ensure they are providing good value to customers.”

The RAC said retailers have increased their profit margins by 4p a litre, from around 5.5p in April last year to 8.59p.

It claimed smaller, independent providers were trying to rebuild profits after the steep fall in sales in last year's lockdowns.

But soaring wholesale costs are also to blame and the price of oil has doubled to more than $86 a barrel over the past year.

Brent Crude, the international benchmark, now stands at more than $86 a barrel.

Some analysts believe the oil price could rise further.

This is due to high demand as economies recover from the Covid pandemic — and the Opec-Plus group of oil producing countries not increasing supply.

The AA said: “Whether it’s down to oil producers, market speculators, Treasury taxes or struggling retailers trying to balance their margins, record pump prices must be saying to drivers with the means it’s time to make the switch to electric.”

Its fuel price spokesman Luke Bosdet added: “As for poorer motorists — many of them now facing daily charges to drive in cities — there is no escape. It’s a return to cutting back on other consumer spending, ­perhaps even heating or food, to keep the car that gets them to work on the road.”

The Chancellor has been under huge political pressure not to raise fuel duty.

Dozens of MPs from Northern Tory pressure group the NRG wrote to him saying: “Those in the North rely on cars to go to work, to take their children to school, and to put food on the table.

“Any rise in fuel duty puts a barrier in the way of people accessing well-paying jobs and taking care of their families. Cars for our constituents aren’t a luxury Chancellor, they are a necessity.”

Last night campaigners urged Mr Sunak to go further and cut the tax.

Howard Cox of FairFuelUK said: “The last 12 months of eye-watering pump prices, seriously made worse by opportunistic fuel supply chain wholesalers, has given the Exchequer an unforeseen VAT windfall of more than £1billion: the equivalent of 3p of fuel duty.”

He said the Chancellor could use the extra VAT to reduce the duty.

Drivers across the country have voiced fury over the rise in fuel prices.

Victoria Bartlett, 49, of Thornhill, Hants, said: “The prices are ridiculous.

“I have to go to have cancer treatment once a week but every three weeks it’s twice a week. I have to be able to do that and my usual errands on £15 a week. If the prices go up any more, I don’t know what I’ll do.”

Lana Fisher, 52, a carer from Southampton, added: “It feels like a rip off — 140.9p a litre and this is the cheapest one around here.”

Dean Cooper, 42, from Croydon, South London said: “It’s ridiculous. It’s £1.39 for the cheapest. I'm a dad of eight kids. It's impacting everything.

“It affects day-to-day life. You go abroad, you spend £50 and you fill up a big V8 (engine). Here, £50 wouldn’t even fill up a Mini.

“No fuel, no movement. The price of fuel on a low income is dreadful.”


WHAT has caused the rise?

Key is the jump in the cost of oil, which has doubled from around $40 a barrel a year ago to $85 now. Demand has soared as lockdowns ended.

Are forecourts increasing profits too?

Yes they are — taking 7.5p per litre, 2p more than at the start of lockdowns.

They argue they are making up for lost earnings during lockdowns when demand for unleaded and diesel slumped.

What about E10?

The new greener fuel uses 10 per cent ethanol rather then five.

Since ethanol is more expensive than petrol, it added around a penny a litre to pump prices.

Will prices go up after the Budget?

Hopefully not. Rishi Sunak has indicated duty will be frozen, but there will not be the cut in VAT motoring groups want.

However, the cost of crude oil — a key factor in determining pump prices — could rise further unless supplies are increased by Opec oil producers such as Saudi Arabia.

What can I do?

If you can’t drive less, then use a service like PetrolPrices.com to find the cheapest in your areas.

Supermarkets, and Asda in particular, tend to be cheapest.

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