Yahoo News Budget 2021: Fuel duty rise axed as petrol prices hit record highs
Fuel duty increases have been cancelled as petrol prices hit record highs, the Chancellor confirmed on Wednesday.
Unveiling his budget, Rishi Sunak said that the tax would remain frozen at 57.95p a litre on petrol and diesel for the twelfth year in a row.
The previous record high was 142.48p recorded in April 2012, according to data from the RAC/Experian. Diesel was priced at 146.89p earlier this week– far above pre-pandemic levels of 125p.
Mr Sunak told MPs: “With fuel prices at the highest level in eight years, I’m not prepared to add to the squeeze on families and small businesses.
Earlier this week it was reported that Mr Sunak had reversed his plans to introduce a 2.84p hike in fuel duty.
He added : “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 £8 billion.”
“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 freeze was welcomed by motoring groups.
RAC fuel spokesman Simon Williams said: “We welcome the Chancellor’s confirmation that duty will continue to remain frozen at 57.95p a litre until next year.
“With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt.”
However critics argued the plan was not in line with the Government’s green targets.
The director of the Institute for Fiscal Studies (IFS), Paul Johnson said freezing fuel duty was a “big tax loss” for the Treasury and “hardly consistent with climate change objectives”.
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