Chancellor Jeremy Hunt is expected to extend the freeze on the rate of fuel duty in tomorrow’s Budget, reports have claimed.
With the Budget just over 24 hours away, Whitehall sources have suggested that the Chancellor will be extending the fuel duty freeze for the 14th year in a row.
A fuel duty cut was first introduced in March 2022 in the aftermath of the Russian invasion of Ukraine, with then-Chancellor Rishi Hunt unveiling the five pence per litre cut.
It was again extended in 2023, bringing the cost to the Treasury to £10billion, and saving the average driver around £200.
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The price of fuel has seen its largest monthly increase since last September
PA
With a planned extension of fuel duty set to be unveiled tomorrow, the Treasury will spend a further £5billion to support motorists at the pump.
This will cancel a planned increase of fuel duty, based on the rate of inflation, which has fluctuated over the last 12 months.
Industry experts had spoken of their fears that the change would have an enormous impact on drivers up and down the country with unfair prices at forecourts.
The Times stated: “Although not raising fuel duty in line with inflation and keeping the 5p cut will cost the Treasury £5billion in the next fiscal year, it does not affect Hunt’s room for other tax cuts because they are deemed to be temporary — even though fuel duty has been frozen since 2011.”
The cut of 5p per litre was set to run out towards the end of March, 12 months after the extension last year.
This would have forced the rate of fuel duty up from 52.95p per litre to 57.95p per litre. There has not been an increase in fuel duty since 2011.
Speaking last week, Howard Cox, founder of FairFuelUK, delivered a petition to Downing Street with 126,092 signatures calling on the Government to slash fuel duty.
This was in addition to the support of 40 MPs, with Cox saying that the Chancellor must deliver a Budget for motorists.
The Reform UK candidate for the London Mayoral election said: “The commercial heartbeat of the economy needs this much-troubled Government to deliver some fiscal cheer instead of drivers being continually used as cash cows.
“Deep down, the Treasury knows full well that motorists are a major solution to alleviating the chronic cost of living crisis and should not be treated as perennial cash cows.
“Time to give drivers more than a moral break, and recognise they already pay way too much in charges and taxes, and do what is financially right for the economy and cut fuel duty big.”
Some people have suggested that the Chancellor’s extension to the fuel duty cut will boost the Conservative’s chances of winning over motorists.
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Jeremy Hunt will unveil the Budget tomorrow, March 6
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With a general election likely to take place in the second half of this year, drivers around the UK will be keen to see what the political parties pledge to help them during the cost of living crisis.