Chancellor extends fuel duty cut for another year in Budget

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Chancellor Jeremy Hunt has today announced an extension to the fuel duty cut on petrol and diesel in the Budget.

Speaking in the Commons, Hunt said that he would maintain the 5p reduction in fuel duty per litre, and also put a freeze on further increases in the next 12 months.

In a bid to help reduce the impact of rising fuel prices, it was at last year’s Budget when a 5p cut in fuel duty was announced, which has remained since.

The last extension to this cut was in the autumn, but there was worry that the Chancellor would abandon the 5p cut, and then increase fuel duty in rise with inflation – which would have amounted to an 11p increase per litre of fuel.

Chancellor Jeremy Hunt said: “Because inflation remains high, I have decided that now is not the right time to uprate fuel duty with inflation or increase the duty, so here is what I’m going to do. For a further 12 months I’m going to maintain the 5p cut and I’m going to freeze fuel duty too.”

Hunt said this further freeze would save the average motorist £100 in the next year, on top of the £100 drivers have already saved since the measure was first introduced.

Today’s announcement has been welcomed by motoring organisations, with the RAC saying it has “given drivers much-needed relief”.

RAC head of roads policy Nicholas Lyes said: “We welcome the Government’s decision to keep the 5p fuel duty cut in place for another 12 months. The cut has given drivers some much-needed relief in what has been the most torrid year ever at the pumps, with price records being broken even after duty was cut.

“Given the importance of driving for consumers and businesses, duty should be kept low to help fight inflation.”

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