Motorists’ relief as fuel duty stays frozen
DRIVERS breathed a sigh of relief yesterday after fuel duty was frozen for the tenth year in a row, saving families around £60 a year.
The tax on petrol and diesel will remain at 57.95p per litre, as it has since March 2011, the Chancellor announced.
Mr Sunak cancelled a planned 2p-a-litre tax rise at the pumps due next month.
The rumoured increase had been met with fury by Tory MPs from former Labour ‘Red Wall’ constituencies who warned against ‘clobbering’ blue-collar communities by going ahead with such a move.
Mr Sunak told the Commons: ‘I have heard representations that after nine years of being frozen, at a cost of £110billion to the taxpayer, we can no longer afford to freeze fuel duty… I’m certainly mindful of the fiscal cost and the environmental impacts.
‘But I’m taking considerable steps in this Budget to incentivise cleaner forms of transportation, and many people still rely on their cars. So I’m pleased to announce today that for another year fuel duty will remain frozen.’
The Budget document also confirmed that the Plug-In Car Grant, subsidising the purchase price of a new electric car, has been extended to 2023.
Freezing fuel duty for another full year until at least April 2021 will cost the Treasury £800million but it delivers on a General Election promise by Boris Johnson. It is projected to save motorists £1.20 every time they fill up an average 60-litre tank.
In a separate measure, tax relief was abolished from April 2022 on ‘red diesel’, a fuel used by off-road vehicles.
The subsidy, described by Mr Sunak as a ‘£2.4billion tax break for pollution’, will be abolished for most sectors and will see prices soar for those using it. But farmers and fishermen were exempt from the changes after the Treasury heard representations from their industries.
The fuel, which is dyed pink to ensure it is not illegally used in road vehicles, accounts for about 15 per cent of the diesel in the UK. It is taxed at 11.14p per litre, compared to 57.95p for standard diesel.