Fuel prices still cause concern despite duty postponement

JonathanNovember 30, 2011

Motoring costs such as tax, insurance and finance payments can quickly accumulate, especially for individuals and businesses that rely on their vehicles for work purposes.

People can minimise many of these expenses and simplify their expenditure by switching to a van or car leasing scheme, meaning one of the only major costs that remain to people with a leased vehicle is fuel.

Proposed legislation which was due to come into effect on January 3rd and would have increased fuel duty rise by 3p per litre has been postponed by chancellor George Osborne.

In his autumn statement, Mr Osborne said that the rise will now be implemented on August 1st 2012. The government said that the decision was made not only to help cash-strapped families, but also to allow businesses, who are dependent on cars and vans, to grow and hopefully stimulate the wider economy.

The statement also outlined that a new industry-led committee will try to increase the prevalence of low-emissions technology within the logistics industry. A major part of the task force’s role will be to find a method of integrating the changes while causing minimum disruption to the industry.

Van leasing businesses would have an advantage over other firms as the process of incorporating the innovations could be as simple as switching their leased vehicles.

Campaigners had put pressure on the government to scrap the rise in fuel duty which is already among the highest in Europe and welcomed the announcement.

“The chancellor has seen sense on this vital issue. Cash-strapped drivers will have a heavy duty sigh of relief as current pump prices are close to the record high,” said AA president Edmund King.

Despite the move to postpone the rise, increasing fuel efficiency and lowering motoring costs are still a major concern for many motorists and fleet owners.

According to Credit Action, it currently costs £67.25 to fill up the average 50-litre car with unleaded petrol in the UK and many believe these prices are unsustainable.

Motoring journalist Quentin Wilson, who is spokesperson for FairFuelUK, told the Guardian: “A freeze is welcome, but we still feel that the chancellor should go further and reduce duty. A cut would be less money spent filling up and more released into the wider economy.”

If the government does not heed the pleas then fleet managers and drivers could look at changing their vehicles to maximise fuel efficiency.

Fuel-economy.co.uk states that the most efficient vehicles currently on offer to British motorists are hybrids and diesel super minis.

The Honda Insight petrol hybrid tops the list and is capable of 83.10 miles per gallon of fuel. The car comes with a five-speed manual gearbox and an A VED Band rating. Other effective options open to car leasing customers are the Citroen C1 and C2 1.4-litre diesels, which have both been recorded to produce 68.90 miles per gallon.

For those looking for a petrol car, the most efficient is the 80 brake horsepower automatic Smart Roadster, but its fuel economy of 55.80 miles per gallon is significantly lower than that of the diesel-powered cars.

Many manufacturers are aware of the needs of drivers and are striving to make new innovations to save fuel.

Mazda recently announced that its new SKYACTIV engine will be available in the early months of 2012. The firm states that the invention will give increased fuel economy and lower emissions without compromising performance due to its ultra-lightweight design and 14:1 compression ratio.

The Japanese manufacturer has also developed a new braking system which harvests electricity as the car slows, meaning the engine can be switched off while the driver is at a standstill in heavy traffic.

Van leasing customers could opt for Volkswagen models as they can be fitted with the company’s BlueMotion technology. The vans feature Stop/Start systems, battery regeneration and low rolling resistance tyres to help the driver improve their fuel efficiency.

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