London UK: The RAC believes that the government has “no option” but to reverse the Tories’ 5p per litre cut in fuel duty in the Budget, but Logistics UK and the Road Haulage Association and are both calling for a further freeze on duty.
The RAC’s head of policy, Simon Williams, said: ‘We’ve reached the conclusion the Chancellor has no option but to put fuel duty back up to 58p a litre in the Budget. She knows the 5p discount is losing the Treasury £2bn a year.
The RAC is calling for the tax to be replaced by a pay-per-mile system ‘as soon as possible’.
The RAC comments follow a warning from lobby group FairFuelUK which claims it has “credible intelligence” that the government is planning to hike fuel duty by 10p per litre in the Budget.
The extension to the 5p per litre cut in fuel duty is set to end in March 2025. Logistics UK’s Budget submission called for the cut to be maintained for a further year. According to Logistics UK’s analysis, a 1p increase in fuel duty would cost haulage businesses in the UK over £185m per year. Logistics UK argues that increasing costs for the transport and logistics industry would apply the brake to economic growth while driving up the price of everyday goods.
The RHA also wants the government to maintain the fuel duty freeze — “otherwise there will be dangerous consequences for thousands of businesses”. Its own analysis showed that a 5p increase “could slash £430m from Britain’s national income each year for five years.” It wants an essential user rebate for commercial vehicle operators, warning that rising fuel costs could “drive up inflation”.
