Motoring groups disappointed by fuel duty rise

JonathanMarch 22, 2012

A proposed increase in fuel duty of 3p per litre will go ahead in August this year, the chancellor has confirmed.

George Osborne said in his 2012 Budget speech yesterday (March 21st) that there are no plans to alter the plans to raise the tax, which has sparked criticism from motoring organisations.

Now may be a good time to consider car or van leasing as it offers a reduction in the upfront costs of motoring and distribution, freeing up extra cash so that companies can afford higher prices at the pump.

President of the AA Edmund King has stated the decision to press ahead with the 3p rise in duty is “inflicting more pain for no gain on drivers” as rises are likely to prompt people to cut back on spending as prices remain at record levels.

Mr Osborne pointed out that fuel duty had been reduced by 6p compared with the rate planned by the previous government and the escalator leading to above-inflation rises scrapped.

However, he added: “I do not propose to make any further changes to the fuel duty plans already set out.”

Director of the RAC Foundation Professor Stephen Glaister remarked: “The chancellor’s decision to go ahead with the summer rise in fuel duty is as unsurprising as it will be disappointing to 34 million drivers.”

The increase will take place despite a poll by the Mirror finding that three-quarters of voters wanted to see a cut in fuel duty announced by Mr Osborne.

Vehicle Excise Duty will also continue to climb at the rate of inflation and higher rises to fuel tax will only come in if oil prices drop below £45 per barrel for sustained periods, according to the Budget.

A decision to increase the percentage list price of company vehicles subject to tax may also affect car leasing contracts.

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