RAC reaction to Spring Statement announcement that fuel duty will be cut

Image: Getty

Reacting to the Chancellor's announcement made this lunchtime, RAC head of policy Nicholas Lyes said:

“With petrol and diesel prices breaking records almost daily, and the cost to fill up a petrol car at over £92 and a diesel at nearly £100, we’re pleased to see the Chancellor has given drivers some much-needed relief at the pumps, but the reality is that a 5p cut in duty is something of a drop in the ocean. In reality, reducing it by 5p will only take prices back to where they were just over a week ago. With the cut taking effect at 6pm tonight drivers will only notice the difference at the pumps once retailers have bought new fuel in at the lower rate. There’s also a very real risk retailers could just absorb some or all of the duty cut themselves by not lowering their prices. If this proves to be the case it will be dire for drivers. It also wouldn’t be totally unexpected based on the biggest retailers not reducing their prices late last year when the oil price fell sharply.

“Temporarily reducing VAT would have been a more progressive way of helping drivers as the tax is applied at the point the fuel is sold. It’s also the case that the Treasury is benefitting hugely from the high fuel prices because of greater VAT revenue. The Chancellor is currently getting 28p a litre VAT on petrol and 30p on diesel – this of course comes on top of fuel duty as VAT is a tax on a tax.”

For more on petrol and diesel prices, check RAC Fuel Watch.

Press office team

Press office team

For journalist enquiries only

Share

Latest stories

Website preview
Fuel prices fall in August after two months of rises - but drivers continue to pay over the odds at the pumps
Average pump prices fell by less than a penny in August ending two months of rises, new analysis by RAC Fuel Watch has found.
media.rac.co.uk
Website preview
Drivers divided on how to tackle pavement parking in England – but most want action
UK Government due to announce next steps on tackling problem pavement parking in England
media.rac.co.uk
Website preview
Draft third Road Investment Strategy published - RAC reaction
Following the publication this morning of the draft third Road Investment Strategy ('RIS3'), which sets out the Government's priorities for the country's major road network, RAC head of policy Simon Williams said:
media.rac.co.uk

Get updates in your mailbox

By clicking "Subscribe" I confirm I have read and agree to the Privacy Policy.

About RAC Media Centre

The RAC Media Centre provides journalists and news outlets with the latest motoring-related news, comment, data and research.

The RAC is an iconic UK brand, and provides complete peace of mind to 15 million UK private and business drivers - whatever their motoring needs. As well as its premium nationwide breakdown assistance service – with an expert branded patrol workforce attending more than two million breakdowns every year – and European breakdown assistance products, it offers a wide range of market-leading products across insurance, legal services, vehicle inspections and service, maintenance and repair. Included in this is the first-of-its-kind nationwide Mobile Mechanics service which brings the garage to homes and workplaces. 

At the forefront of new solutions for business fleets and consumers, the RAC’s breakdown service is electric-ready with mobile EV charging technology and be called on using myRAC – its all-in-one route planner, fuel finder and breakdown reporting app

Contact

press.office@rac.co.uk

media.rac.co.uk