Taxing movement: another rise in fuel duty

A 23% rise in fuel duty is officially part of the Treasury’s plans, despite not being mentioned by Jeremy Hunt in the budget.

The head of the Office for Budget Responsibility (OBR) has confirmed to MPs that the Treasury formally asked the OBR to assume a 23% rise in fuel duty in March 2023, through the reintroduction of the Fuel Duty Stabiliser annual increase, which has been cancelled every year since 2011.

While Jeremy Hunt did not mention fuel duty in his budget, the OBR stated afterwards: “The planned 23% increase in the fuel duty rate in late-March 2023, which adds £5.7bn to receipts next year . .  is expected to raise the price of petrol and diesel by around 12p a litre.”

Actually, with VAT, that will be more like another 15p per litre, just showing the extent to which the Treasury is taking advantage of the high price of oil to extract vastly more tax from motorists.

Comparative pump prices show the UK has the fifth highest diesel fuel price in the world. Diesel is 22p/litre cheaper in Germany and 28p cheaper in Spain (which are not even in the chart below, ranked at 15th and 24th).

The situation is no different when it comes to petrol. High tax Britain has the 12th highest petrol price in the world, with petrol 8p/litre cheaper in Germany and 12.5p cheaper in Spain (still not in the chart at 20th and 26th!). The Treasury shouldn't gouge British drivers even more.

Reducing inflation was said to be a primary aim of the budget, but the 23% fuel duty hike will be highly inflationary. Increased transport prices will push up other prices and van and lorry drivers will be forced out of business. The knock-on effects of taxing the movement of people and goods are obvious.

As @FairFuelUK says, “The Treasury knows full well, petrol and especially diesel prices at the pumps, critically affect inflation, logistics, business viability, jobs, and GDP.” The Government needs to demonstrate some common sense and restrain the Treasury tax hikers.