Budget 2013: Fuel Duty Frozen Again

Chisel Split Ice

The chancellor has frozen fuel duty again, cancelling a 3p rise planned for September.

The widely anticipated decision comes after sustained pressure from motoring groups and backbench Tory MPs, who have argued that the high oil prices of the last few years were already making driving prohibitively expensive.

The duty on a litre of unleaded petrol or diesel will remain at 57.95p until at least September 2014. The deferral is likely, on past official estimates, to cost the Treasury around £1.6bn in lost revenue over the year.

Motoring lobbyists point to the VAT rise in 2011 which increased the government's tax take on fuel to about 60%, or 83p on the average £1.38 current pump price of a litre of unleaded.

George Osborne had already cancelled rises due under the "fuel duty escalator" put in place by his predecessor in the previous, Labour government. In the last autumn statement he scrapped an increase he had already deferred until January, and now it appears he may freeze fuel duty rises throughout this parliament.

Motoring organisations welcomed the announcement. The RAC's technical director David Bizley said it was "great news", and the government needed to find better ways of funding the road network "without unfairly punishing less affluent motorists, who have no alternative to the car for the basics of life."

Powered by Guardian.co.ukThis article was written by Gwyn Topham, transport correspondent, for guardian.co.uk on Wednesday 20th March 2013 13.36 Europe/London

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