Wednesday’s Autumn Statement by the Chancellor of the Exchequer could signal the end of the government’s halt on fuel duty – meaning that from January 2013 motorists’ wallets will be hit hard.
Should the planned 3p increase on fuel duty go ahead, a litre of unleaded petrol would then typically cost almost 61p, as opposed to 57.95p. At 3p per litre, the cost of refuelling a 50-litre fuel tank would rise by £1.50 – it might not seem like a lot, but considering the amount of fuel used over the course of weeks, months and years this would really add up for families!
The AA spoke out against plans earlier this week, pointing to figures raised by the Treasury of almost £27 billion in the financial year ending April 2012. It also raised concerns that less petrol was being sold as a result of current prices – with over £300 million lost on fuel duty between April-October compared with the same period in 2011. The AA also raised concerns that another rise on fuel prices – whether dictated as tax by the government or due to the market price of oil – would continue to harm sales.
Day-to-day sales would also be impacted; further increases in fuel duty would lead either to overspending on fuel and sacrificing on another budgetary requirement such as home heating or electricity, while consumers’ buying less fuel could also impact other areas of the economy. For example, with less fuel in the car people will think twice about doing their weekly shop – meaning an adverse effect on the retail industry. It’s quite a drastic consequence but these are things that the Chancellor must consider when deciding whether or not to go ahead with the rise in fuel duty later this week.