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AUTUMN STATEMENT - Fuel duty rise deferred

Date: 29 November 2011

Fleet operators have welcomed the Chancellor of the Exchequer's decision, announced in the autumn statement, to defer the planned January fuel duty rise until August 1 next year. He has also scrapped a planned August 2102 inflation-linked rise entirely.

As a result of the decision, there will be just one fuel duty rise in the next nine months and the tax on unleaded petrol and diesel will go up by 3.02 pence per litre.

However, Julie Jenner, ACFO chairman, warned that the Chancellor could look at fuel duty again in the Budget in the spring.

"The intensive business and consumer lobby against fuel duty increases when corporate and private budgets are under so much pressure meant the Chancellor had no choice but to cancel the January increase," she said.

"By cutting the proposed August 2012 duty increase to 3p a litre from 5p a litre I think he has tried to appease the protests but has also brought himself time to see how the economy is performing in eight months."

Brian Madderson, representing the petrol retailers, said: "We will continue to lobby government and their officials to defer the duty increase still planned for 1 August next year. With RPI inflation indexing and 20% VAT the retail price impact could be 4.00ppl at the pump, which we argue is too much and too early in the cyclical recovery of the economy."

The Chancellor also announced the current duty differential for liquefied petroleum gas will be maintained until 1 August 2012 when it will be reduced by one pence per litre.

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