Government postpones planned rise in fuel duty

Tue 26 June 2012 View all news

The Chancellor, George Osborne, has announced that he is to postpone the planned 3p per litre rise in fuel duty from August until January 2013. The move was welcomed by road users' groups but criticised by some NGOs.

The decision follows a campaign by road user groups aimed at encouraging the Chancellor to take the pressure off motorists and transport operators.

The BBC reported that the Sun newspaper and several Conservative MPs have also been pushing for a change of heart, amid concerns that prices at the pumps are squeezing living standards.

Announcing the postponement of the duty rise, Mr Osborne said: "We are on the side of working families and businesses and this will fuel our recovery at this very difficult economic time for the world."

The move was welcomed by the Freight Transport Association and the Road Haulage Association (RHA) as well as by the RAC Foundation. An RHA spokesman said: "Today’s announcement will prevent further pressure being applied to the profitability and cash flow of UK hauliers in particular. The duty increase would have added £1,200 a year to the cost of running a truck.”

The Campaign for Better Transport, however, described it as "a knee jerk isolated response to a party political problem". A CfBT spokesman said that the move would cut Government income at a difficult time and that the loss will mean cuts in departmental spending, some of which may have been earmarked for public transport improvements.

CfBT also pointed out that the overall costs of motoring have been falling for the past decade or so while the cost or rail and bus fares have risen significantly above inflation.  

Business Green reports an ACFO spokesperson who warns that businesses need to retain their focus on improving economy and cutting CO2 emissions as further fuel duty and product cost rises are certain to happen in future.

Fuel prices at the pump have fallen sharply in recent weeks due to falls in crude oil and product prices.

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