Osborne scraps planned fuel duty rise

Despite British MPs voting against a suspension of a 3p per litre fuel duty rise on 12 November, George Osborne has scrapped the rise. "Big Ben's chimes ringing in a nearly £2-a-tank hike in petrol and diesel prices would have backfired on the Government and economy," says AA president Edmund King, commenting on the move.

A canny move by the Chancellor?%VIRTUAL-SkimlinksPromo%

Protest pressure

A fuel duty increase in winter, when petrol is often cheaper, might have been easier politically to push through, despite huge public antipathy to a further rise. Osborne, then, will have gained some positive headlines by the move and also swerved any likely re-run of the fuel protests that plagued the UK in 2000.

Still, the duty remains at almost 58p a litre of petrol or diesel hauling in £27bn to Treasury coffers. To put this into perspective, for every £60 paid filling up, about £36 goes on fuel duty and VAT. UK motorists contribute £45 billion to the Treasury every year, just a fraction of that goes to improving UK roads.

Cutting back

However, the Green Party did not support Osborne's move: "We understand many households are struggling with the cost of petrol in addition to rises in food, housing and heating, but the fact is that over the past 10 years the real cost of motoring has declined by 10%, while bus and train fares have increased by more than 50%."

Fuel duty in Britain remains the highest in Europe. Many living in small towns, the suburbs and the countryside are the hardest hit by surging oil prices.

A joint survey of more than 9,000 people by the RAC and FairFuelUK claims three quarters of British motorists are using their car less today than a year ago, with some taking extreme measures to cut back on the miles they drive.

Treasury fuel duty receipts – financial years AA figures

2011/12 - £26.80bn from 50.60 billion litres of fuel
2010/11 - £27.26bn from 51.70 billion litres of fuel
2009/10 - £26.20bn from 52.83 billion litres of fuel
2008/9 - £24.62bn from 54.15 billion litres of fuel
2007/8 - £24.91bn from 56.17 billion litres of fuel
1997/8 - £19.46bn from 57.59 billion litres of fuel
1991/2 – £10.99bn from 63.40 billion litres of fuel

Fuel duty changes

23 March 2011 – 57.95
1 January 2011 – 58.95
1 October 2010 – 58.19
1 April 2010 – 57.19
1 Sept 2009 - 56.19
1 April 2009 – 54.19
1 December 2008 – 52.35
1 October 2007 – 50.35
2 July 1997 – 40.28
Read Full Story