The AA has called upon the Government to cut fuel duty by 10p per litre immediately and introduce a fuel price stabiliser to help counter the “crippling” effect of record petrol and diesel prices on drivers and businesses.  

The AA says the Government should cut fuel duty by 10p per litre immediately and introduce a fuel price stabiliser

Fuel prices have gone up every day this week and average petrol costs are now up by more than 8p a litre compared to a week ago – Tuesday saw the average price of petrol make its biggest daily jump in 17 years while further rises yesterday pushed the cost of filling a typical petrol car’s tank above £100 for the first time ever.  

The AA has warned that these price rises are not sustainable with the general cost-of-living crisis and demanded that the underlying issues be addressed urgently.  

It’s calling for a fuel price stabiliser that would work by reducing fuel duty when prices go up and increasing it when prices drop, giving more certainty to drivers and businesses. Currently, following the 5p cut, duty stands at 52.95p per litre and the Government also adds 20% VAT on the price of fuel.  

But the AA also says the Government needs to introduce a national Fuel Price Checker to “stop the postcode lottery when it comes to rip-off fuel prices”. Such a system is already working well in Northern Ireland where both petrol and diesel are on average 6p per litre cheaper than in the rest of the UK. The Consumer Council in Northern Ireland said yesterday (8 June 2022) that views of its online Checker have gone up 526% this year. Such pump price transparency has also been long-established in many European countries.  

The knock-on effects on the fuel crisis were revealed in a recent AA poll of 14,467 drivers; 2% of low-income households say they will have to sell their car and not replace it, while more than a quarter (27%) have cut back on their food bills compared to one in five (21%) for the national average.  

However, in the first sign of hope since the spring, fuel costs feeding the pump prices are continuing to level off, reports the AA.   

“The £100 petrol tank has been dreaded and been particularly nasty for workers refilling their cars with the post-Jubilee return to work,” said Luke Bosdet, the AA’s fuel price spokesman.  

“The more than 8p-a-litre leap in average petrol costs over a week has been a huge shock but at least, for now, the threat of the £2-a-litre average on forecourts has receded.”

The RAC has also continued to call for government action, warning that March’s 5p fuel duty cut now looks paltry as wholesale petrol costs have already increased by five times that amount since the Spring Statement (25p).

It says a further duty cut or a temporary reduction in VAT would go a long way towards helping drivers, especially those on lower incomes who have no choice other than to drive.

“It’s also important to remember that the Government is still benefiting from the high fuel prices by taking around 30p in VAT from every litre sold,” added RAC fuel spokesperson Simon Williams. “This compares to just 25p before Russia invaded Ukraine. On top of this the Government is still collecting 53p fuel duty from every litre,” he pointed out.