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Motorists could see ‘double whammy’ pump price rise in coming weeks, warns RAC

By / 5 years ago / Latest News / No Comments

That’s according to the RAC which says even without a duty rise, motorists might be about to experience the first significant rise in average fuel prices in eight months as the oil price is close to going back above the $40 mark for the first time since 4 December 2015. Combined with a weaker pound, this is likely to lead to a rise in pump prices of around 3p a litre.

The RAC is urging the Chancellor not to increase fuel duty as it highlights that both independent modelling and the Treasury’s own analysis have demonstrated that an increase in fuel duty has a negative impact on economic growth.

Nearly seven in 10 (68%) of the motorists polled by the RAC said their driving and lifestyles would be negatively impacted by a duty rise, with half (49%) fearing the increased costs would lead to them spending less on other items and almost a quarter (23%) saying they would probably drive less.

RAC fuel spokesman Simon Williams said: “The Chancellor has an excellent record of freezing duty but by not referring to it in the Autumn Statement, he implied that the 57.95p currently charged on every litre will be subject to inflationary increases in line with RPI from April 2016 onwards. And, even an above inflation increase cannot be ruled out. But what is very clear is that any increase will go down like a lead balloon with motorists.

“We strongly urge Mr Osborne not to go down this route. As a tax, fuel duty is well past its ‘sell by date’ – a fact clearly demonstrated by the underlying year-on year decline in revenue as vehicles become more fuel-efficient and ultra-low carbon vehicles become the norm. Indeed, fuel duty revenues have only been maintained at their current levels because nearly two million extra cars have been licensed for road use in the last five years. However, the Chancellor cannot rely on an ever-increasing number of cars on the road to balance the books.

“The Chancellor should really be giving more back to motorists who are constantly complaining that the quality of the country’s roads is sub-standard. Whilst the Government is to be applauded for announcing ring-fenced funding for major roads, local roads are still in dire need of an increased level of long-term investment.”

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