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Budget 2021: Fuel duty to remain frozen

The Chancellor has confirmed in today’s Budget that the current fuel duty freeze will be maintained for an 11th successive year.

There had been rumours that fuel duty would go up in the Budget to pay off the ‘Covid Bill’

The freeze was announced by Rishi Sunak as he said he was “not prepared to increase the cost of living”.

There had been rumours that fuel duty would go up in the Budget to pay off the ‘Covid Bill’, but according to reports, plans for a rise were axed under concerns it would impact those people helping the economy ‘bounce back’ – in particular van drivers and operators.

The news has been welcomed by the Petrol Retailers Association (PRA). Chairman Brian Madderson said: “Fuel duty is a regressive tax on business and livelihoods so any attempt to increase it would have been entirely counter-productive as the economy gets back on track.”

The FairFuel UK campaign has also responded, thanking the Chancellor and the Prime Minister as it continued to highlight how the fuel duty freeze has positively benefited the economy.

“Motorists, van drivers and truckers across the UK will be pleased at this protracted decision from the Chancellor. They will hope this is just the start of more pro motoring policies, which have been sadly lacking in this Parliament. The cost of navigating our roads still remains the highest in the world and drivers continue to be demonised for all environmental ills by mis-informed politicians, but continuing the cap on duty will be warmly welcomed.”

And the RAC said it was a wise move not to ‘rock the fuel duty boat’.

Head of policy Nicholas Lyes said: “We feared this would only pile further misery on drivers at a time when pump prices are on the rise and many household incomes are being squeezed as a result of the pandemic.

“Many drivers see their cars as a safe way to carry out essential journeys and believe having access to a vehicle is even more important as a result of the pandemic. If the Chancellor had raised fuel duty, he could have risked choking any economic recovery as it would have led to increased costs for consumers and businesses.”

But Lex Autolease has said that while the continued freeze makes sense for now, a future fuel duty increase is likely to be inevitable, in order to push the shift to low- and zero-emission vehicles.

Ashley Barnett, head of fleet consultancy, commented: “An alternatively fuelled future simply can’t happen overnight. The affordability of EVs is a key barrier towards mass adoption and for some people, an ICE vehicle remains their only option. Against the backdrop of the pandemic, many people are still using cars as a safer mode of transport and any rises would feel counterproductive at this moment in time.  As momentum continues to shift away from petrol and diesel, a future rise in the 10-year fuel duty freeze feels inevitable and will help fund investment in greener alternatives.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006.