Budget 2012: Planned fuel duty rise will go ahead

Published by Rebecca Rutt on 21 March 2012.
Last updated on 21 March 2012

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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