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Fuel duty rise postponed

Date: 14 December 2011   |   Author: Rupert Saunders

Fleet operators have welcomed chancellor George Osborne's decision to defer the planned January fuel duty rise until 1 August next year.

The announcement was made in the recent autumn statement, in which he also revealed that the Government would scrap a planned August 2012 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 three pence per litre.

However, ACFO chairman Julie Jenner 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."

But Jenner wasn't completely happy with the decision. "While we are pleased that the chancellor will not press ahead with the 3p a litre January increase, fleets, business drivers and private motorists are no better off," she said.

"Fuel prices remain extremely high so it would have been more helpful if he had relieved pressure on business and private fuel budgets by cutting duty."

Brian Madderson, representing the petrol retailers through his role as chairman of RMI Petrol, 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 4ppl 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 LPG will be maintained until 1 August 2012 when it will be reduced by 1ppl.



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