Motorists may be breathing a sigh of relief as fuel costs remain stable in the run up to Christmas. However, drivers can expect another rise to currently frozen fuel duty rates once again towards the end of 2015.
Though chancellor George Obsbourne confirmed yesterday that rates will remain unchanged in April 2015, motorists will see an increase to duty rates in September 2015. In addition, a report from the Office for Budget Responsibility (OBR) referred to increases in duty in line with RPI inflation every April from 2016 to 2019, meaning that drivers are likely to have to dig further into their pocket when filling up.
We welcome the continual freeze in fuel duty but the Chancellor's tax take is now approaching 70 per cent. He could have done more.
Despite the freeze in current rates, some motoring figures are pointing out that tax still makes up a vast proportion of fuel prices. Fuel price campaigner Quentin Willson told the Press Association: “We welcome the continual freeze in fuel duty but the Chancellor's tax take is now approaching 70 per cent. He could have done more.”
Meanwhile, president of the AA Edmund King has stated that a vast majority of AA members are concerned that motoring taxes could rocket following the general election in May 2015. While King welcomes frozen duty rates until September and the confirmation of £15 billion investment in the road network, he adds: “our members were right to be sceptical about future taxes."
Defending the rising duty rates, the report from the OBR states: “Fuel duty revenues in each year between 2011-12 and 2015-16 are below their 2010-11 level, thanks in part to the reduction in the duty rate in April 2011 and subsequent duty freezes.”
December 4, 2014