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Fuel prices set to soar after election, AA warns drivers

Fuel prices set to soar after election,  AA warns drivers

Motorists have been warned that fuel taxes could soar by 10% after next year’s UK election.

The Automobile Association claimed that frozen rates of duty could quickly move “from thaw to meltdown” following the Westminster poll.

It highlighted official forecasts from the Office for Budget Responsibility (OBR) which show that revenues from taxes on petrol and diesel are due to rise by 10% over the next five years.

AA president Edmund King predicted that prices at the pumps would become a key battleground in the run-up to the election, as he called on the main parties to spell out their plans for fuel.

Chancellor George Osborne has already cancelled several fuel duty rises, freezing the levy for the duration of this parliament, until next May.

Speaking on the eve of the Budget, Mr King said: “If a 10% increase in fuel duty revenue is still the target, political parties will have to say whether they support it and how they will meet the challenge.

“That will make fuel duty, alongside other motoring taxation and spending on roads, a major battleground in the next election.”

He added: “The coalition deserves recognition for canceling increases in fuel duty to help family budgets but, until wages catch up with inflationary increases since 2008, there is still pressure on family budgets.

“Latest government traffic statistics show that, although economic recovery has lifted motorway traffic 2.9% since the boom period of 2007, last year’s traffic on rural main roads was down 2%, urban main roads was down 4%, rural minor roads was 6% lower and traffic was 4.3% lower on urban minor roads.”

OBR figures published in December show predicted Treasury revenues from fuel increasing by 10% from £26.6billion in 2012-13 to £29.6billion by 2018-19.

The AA believes it is “unlikely” that this rise could be met through higher fuel consumption, and that higher taxes are the only other option.

With fuel duty currently at 57.95p a litre, an increase of 10% would add almost 7p.

That would costing an average family an extra £4.90 to fill up the tank of their car.

A Treasury spokes- woman said: “The government understands that times are tough and budgets are squeezed, and we have continued to take action to help with the cost of living. In recognition of the impact that high pump prices have on the cost of living, we have cancelled the September 2014 fuel duty increase, worth 1.61p per litre, freezing fuel duty for the remainder of parliament.”

She added: “The total impact of government action on fuel duty since 2011 will lead to prices being 20p per litre lower than they would have been under inherited plans by 2015.

“By 2015-16, a typical motorist will have saved £680.”