Fuel duty rise is postponed

16 July 2008

The Treasury has announced that a planned 2p per litre rise in fuel duty, due to come into force in October, has been postponed.

The postponement comes against a background of rising fuel costs and protests from businesses over the effect the duty hike would have on their operations.

The 2p increase had originally been set for April but was deferred until October. Now the Treasury has said that the rise is to be put back a further six months.

As a result, main road fuel duty rates will remain at 50.35 pence per litre after 1 October this year. Planned increases in road fuel gases, biofuel duty rates and rebated oils rates will also be postponed.

Announcing the move, the Chancellor, Alistair Darling said: “The global credit crunch and sharp rises in world oil prices have pushed up prices at the pump. The decision will help motorists and businesses get through what is a difficult time for everyone.”

The Treasury estimated that delaying the fuel duty increase will cost the public purse some £600 million in income.

Edmund King, president of the AA, said: “We are delighted that the chancellor has seen common sense. The prospect of extra, government-inflicted pain was not something that road users were looking forward to.

“Many motorists have endured months of misery and this is a welcome piece of good news for them.”

While also welcoming the decision, Kate Gibbs, of the Road Haulage Association, said that the postponement of the rise represented “quite a small drop in the ocean”.