Budget special: fuel duty increases to drip-feed

March 24, 2010 | By | In Statistics

Chancellor responds to protests over fuel prices by delaying next month's 3p per litre riseIn his final Budget before the general election, Chancellor Alistair Darling postponed the planned 3p per litre rise in fuel duty, due to take effect from April. Instead, the rise will be drip-fed in three stages between now and next January.

Pump prices will rise by 1p per litre from the beginning of April. There’ll be a further 1p per litre rise in October and the final instalment will come next January. The Chancellor acted as fuel prices reached record highs – currently they average 117.3p per litre for unleaded and 118p per litre for diesel – although you could pay as much as 127.9p and 129.9p.

The last time they approached such levels was 18 months ago when world prices for crude oil (from which petrol and diesel are refined) climbed close to $150 per barrel as world demand rose. At the moment, though, it costs $80 per barrel and the major oil producing countries say they aren’t even clkose to their production limits – so there is no prospect of a shortage (that would push up prices).

Instead, the petrol suppliers blame high pump prices on the weakness of the £ against the dollar (oil is traded in US dollars), while the Automobile Association says speculators are pushing up whole sale prices by playing the market.

Elsewhere in the Budget the government has also earmarked £100m to repair Britain's roads, now in a terrible state after the severe winter has opened up thousands of potholes.

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