By Alex Glenn • 23 March 2022 • 14:55
The 5p reduction in fuel duty put in place by Chancellor Rishi Sunak will last until March 2023. For a 55-litre tank though the reduction will only save drivers £3.30. Motoring groups have warned that the reduction that comes into force at 6pm on Wednesday, March 23, may not be passed on to drivers.
Speaking to MailOnline RAC head of policy Nicholas Lyes commented: “With petrol and diesel prices breaking records almost daily, and the cost to fill up a petrol car at over £92 and a diesel at nearly £100, we’re pleased to see the Chancellor has given drivers some much-needed relief at the pumps, but the reality is that a 5p cut in duty is something of a drop in the ocean.
“In reality, reducing it by 5p will only take prices back to where they were just over a week ago.
“With the cut taking effect at 6pm tonight drivers will only notice the difference at the pumps once retailers have bought new fuel in at the lower rate.
“There’s also a very real risk retailers could just absorb some or all of the duty cut themselves by not lowering their prices.
“If this proves to be the case it will be dire for drivers. It also wouldn’t be totally unexpected based on the biggest retailers not reducing their prices late last year when the oil price fell sharply.”
Nicholas said that reducing VAT could have helped drivers more. He revealed: “Temporarily reducing VAT would have been a more progressive way of helping drivers as the tax is applied at the point the fuel is sold, removing any possibility of retailers taking some of the tax cut themselves to increase their profits.
“It’s also the case that the Treasury is benefitting hugely from the high fuel prices because of greater VAT revenue.
“The Chancellor is currently getting 28p a litre VAT on petrol and 30p on diesel – this of course comes on top of fuel duty as VAT is a tax on a tax.”
Drivers were furious at the small reduction. Taking to social media drivers labelled it a “joke” and said that it “will do nothing.”
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Originally from the UK, Alex is based in Almeria and is a web reporter for The Euro Weekly News covering international and Spanish national news.
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