Fuel duty expected to rise by 23% next April
According to the Office of Budget Responsibility (OBR), fuel duty could rise by 23% next April which will be the largest rise in the fuel duty rate in history. This would add 12p a litre to the cost of petrol and diesel.
Although there was no mention of any increase to fuel duty in the Autumn Budget - and the Chancellor Jeremey Hunt has since said the government has made "no decision" on the matter, the Office of Budget Responsibility believes the announcement will be made in the Spring.
Fuel duty has been frozen at 52.95p a litre since 2011. Rishi Sunak cut the duty by 5p a litre when he was chancellor in his 2022 spring statement, which due to expire at the end of March.
David Wells OBE, Chief Executive of Logistics UK, said: “Logistics is at the heart of all economic activity in this country, and relies on fuel to facilitate its work, whatever the mode of transport used. Bulk diesel prices have increased by 30% since January. With businesses already under financial pressure, and operating on very narrow margins, a duty hike of this magnitude would have significant impacts, for operating costs and, ultimately, on inflation.
“Although outlined in the Spring financial statement, the fact that the detail of this policy was hidden in the body of the OBR Report and not announced by the Chancellor in the House earlier indicates that the government was hoping to avoid scrutiny on the topic. We are seeking urgent clarification as to whether the duty rise will be implemented as planned, as a rise of this magnitude would have a detrimental effect on the UK’s economy, stifling activity and placing unnecessary pressure on a sector deemed ‘essential’ only a year ago.”