As pump prices smashed through the £2.00 a gallon ceiling, pressure is mounting on the Government to dramatically cut its duty and VAT take from motorists.
Nearly half of the pump prices paid by drivers is duty or tax which goes back to the Government and the RAC said today that the Chancellor’s 5p cut after the Ukrainian invasion has already been offset by the rising charges.
RAC fuel spokesman Simon Williams said, “Another day and another round of fuel price records with both petrol and diesel up by a penny in 24 hours.
“Unbelievably the average cost of a litre of petrol has gone up by more than 7p in just a week to 183.16p , and diesel by 4.5p to 188.82p. Other price records have also unfortunately been set this morning with the average cost of a litre of diesel at a motorway services passing the £2 mark for the first time ever (200.99p). Petrol at the motorway is also at another record of 197.18p.
“It’s becoming clearer by the day that the Government must take further action to reduce the enormous financial burden on drivers. But based on statements given yesterday it seems fixated on ensuring retailers are passing on March’s 5p duty cut fully.”
He added, “In doing so, the Government is ignoring the fact that wholesale costs of fuel have absolutely rocketed since then with petrol having gone up 24%, or around 30p per litre, and it’s these higher costs that are driving the current increases at the pumps. The Government needs to recognise that the 5p duty cut is therefore a drop in the ocean and more needs to be done now to support drivers who are feeling the pain every time they go to fill up their cars.
“It should also not be forgotten that as fuel prices continue to rise, so does the amount the Government makes in VAT. The 5p the Chancellor gave away in his duty cut in March has already been replaced by the 5p extra he is now making in extra VAT following the invasion of Ukraine just a month earlier. A temporary cut in VAT on fuel, or a deeper duty cut, are surely what is needed now.”
The pump prices rising has dramatically added to family and business costs and there have been warnings they will impact on the economy, on tourism, travel and particularly health care in rural Wales where staff and carers have to travel long distances to help patients and those in need.
Emergency services are also feeling the pinch with police, ambulance and to a lesser extent, fire services, also having to pay out more to meet emergencies they cannot forsee. Hauliers, buses and trains are also feeling the pain and some could go out of business before the prices come down, if they ever do.