Budget 2012: Planned fuel duty rise will go ahead

Petrol nozzle

The planned fuel duty increase of 3.02p per litre will come into effect from 1 August as planned, Chancellor George Osborne confirmed today.

This means petrol prices will rise by 3.62p a litre including VAT.

However, while Osborne said the Budget would "ease the burden on motorists", Edmund King, president of the AA, labeled it a "Budget blow-out" that will force two out of three drivers to cut down on journeys to meet the extra cost.

King said the move will swallow up 21% of the extra money available from the increase in the personal tax allowance coming into effect next April.

Once the new tax is in place, it will cost an extra £1.81 to fill up a typical 50-litre petrol tank.

Motoring experts have slammed the decision, saying the duty should have been frozen or lowered.

Gareth Kloet, head of car insurance at confused.com, said: "In a period where there are limited jobs, families struggling to pay bills and young people being priced off the roads as a result of rising car insurance premiums, the government announcement today to go ahead with the 3p rise in fuel duty will be hard for many people to accommodate."

In a bit to soften the blow, the Chancellor announced that prices won’t rise faster than inflation, unless oil prices fall below £45 a barrel.

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