London, UK: Chancellor George Osborne cheered transport companies with his decision to scrap a rise in fuel duty scheduled for introduction in September.
Fuel duty has not gone up since January 2011, when it was raised by 0.76p per litre. It was then cut by 1p in March 2011 and, ever since, planned increases have been postponed repeatedly.
“We’ve now frozen fuel duty for two years,” Osborne says. “This has not been easy. The government has foregone £6bn in revenues to date.”
FairFuelUK spokesman Quentin Wilson says more should be done. “Cancelling a rise that really shouldn’t happen is not enough. The government needs to cut duty substantially to get the economic growth we all need.”
Phil Harrold, PwC Automotive partner, says: “Whilst the freezing of fuel duty is welcome to the beleaguered motorist, the offsetting risk is the exchange rate with the US dollar. As the British pound falls, then petrol prices, which are dollar driven, are forced higher as witnessed over the last two months.
“Moving into the wider transport industry, UK hauliers can also be assisted by the freeze as they are competing with their European counterparts, who in turn are suffering from the inflated dollar. By holding back on fuel duty this will help create a more level playing field with Europe.”
John Lewis, chief executive of the British Vehicle Rental and Leasing Association, say: “This is almost becoming a no-brainer. With the economy flirting with recession and household incomes still falling in relation to inflation, the government just cannot afford to price businesses and households off the road.”
