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Autumn statement: Fears fuel tax could rise next year

Fuel duty is expected to start rising again from next September
Fuel duty is expected to start rising again from next September

Fears have been raised that the cost of petrol and diesel will soon rise again for hard-pressed motorists.

Chancellor George Osborne confirmed yesterday that a previously-announced duty freeze would go ahead in April.

However, a report by the independent Office for Budget Responsibility (OBR) spoke of a duty rise in September 2015, as well as increases in line with inflation in each of the years from 2016 to 2019.

Such hikes would hit drivers in rural areas of the north and north-east particularly hard, because of their reliance on cars and lack of public transport options.

AA president Edmund King welcomed the confirmed April 2015 freeze but said the OBR report appeared to confirm the view of 84% of AA members in a recent poll who said they were concerned that motoring taxes would increase after next May’s general election.

He said: “Many drivers feel that they need some relief from high fuel prices after being pummelled at the pumps for years.

“AA analysis of Treasury petrol and diesel consumption figures show that UK families and businesses remain badly scarred by years of pump price spikes and records, beginning in the summer of 2008.

“Many drivers have been forced to cut back on journeys and have continually complained about the state of many roads.”

Quentin Willson, of the FairFuelUK Campaign, said: “We welcome the continual freeze in fuel duty but the chancellor’s tax take is now approaching 70%.

“He could have done more.”

The OBR report said: “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.

“The next duty rate rise, planned for September 2015, means that receipts are expected to increase by 0.3% in 2015-16.

“From April 2016 onwards duty rate rises are assumed to be in line with RPI inflation, leading to receipts growth of 2.5% on average between 2016-17 and 2019-20.”