Fuel duty is currently levied at 57.95p per litre for petrol and diesel, with VAT at 20% charged on top of the total price.
23 March 2022
Four out of five motorists want the Chancellor to cut duty or VAT on fuel, a new survey suggests.
An RAC poll of 2,000 drivers questioned between Friday and Monday indicated that 83% want Rishi Sunak to help reduce the impact of record pump prices in Wednesday’s spring statement.
Some 41% of those polled said they are driving less due to the cost of filling up, while 25% said they are being forced to cut spending on other items because of pump prices.
Figures from data firm Experian Catalist show the average cost of a litre of petrol at UK forecourts on Monday was 166.6p, while diesel was 178.7p.
Oil prices surged immediately after Russia’s invasion of Ukraine but declined earlier this month, leading to a cut in wholesale costs for fuel retailers.
Fuel duty is currently levied at 57.95p per litre for petrol and diesel, with VAT at 20% charged on top of the total price.
Mr Sunak is reportedly preparing to cut fuel duty by up to 5p per litre.
Calculations by the RAC found a 5p cut would shave around £3 off the cost of filling a typical 55-litre family car.
A cut in VAT of five percentage points would raise the saving to almost £4 for petrol cars and more than £4 for those that run on diesel.
RAC head of policy Nicholas Lyes claimed there is “enormous pressure on the Chancellor to act today to help drivers”.
He said: “The fact the Treasury has enjoyed something of a VAT windfall in recent months with pump prices as high as they are surely gives Mr Sunak the fiscal means of intervening to assist households, many of which will be struggling right now.
“Despite rumours of a cut to fuel duty now in wide circulation, our analysis shows that in many ways a cut in VAT would benefit drivers more – and be fairer on those who run diesel vehicles and are paying a significant premium for the fuel right now, with the cost of filling a family-sized car almost at the £100 mark for the first time.
“A temporary cut in VAT to 15% would see around £3.80 come off the cost of filling a family car with petrol, and £4.10 off one that runs on diesel.
“What’s more, a cut to VAT would help reduce the impact of future pump price rises – something a fuel duty cut doesn’t achieve.
“Whatever the Chancellor may have up his sleeve today, the sheer strength of feeling among drivers and businesses for him to act is clear.
“Doing nothing and forcing millions who depend on their vehicles to cut their spending in other areas simply to keep them running doesn’t appear to be an option.”
