Petrol and diesel prices to get 'significantly worse' if Labour unveil new fuel tax changes
Rachel Reeves will be forced to make a big decision on fuel duty in the October Budget
PA
Experts are warning that petrol and diesel drivers could be forced to deal with permanently high fuel prices if Labour makes changes to the rate of fuel duty in the next Budget.
Earlier this week, Chancellor Rachel Reeves announced a number of plans to help the new Labour Government deal with a £20billion funding black hole, including a pause to A303 and A27 road projects.
Alongside this, the MP for Leeds West and Pudsey, announced the date for Labour's first Budget, namely October 30, alongside a comprehensive report from the Office for Budget Responsibility.
One of the biggest changes for motorists will be any announcement regarding the rate of fuel duty, which is currently frozen at 52.95p per litre.
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Drivers saw record fuel prices in the summer of 2022 PAFuel duty was first cut by five pence in March 2022 under Jeremy Hunt following the Russian invasion of Ukraine, which saw global oil prices spiral.
Since then, under the Conservative Government, fuel duty has been frozen every year, although fuel prices have remained higher than historic levels.
The latest data from RAC Fuel Watch shows that a litre of unleaded petrol currently costs 145.22p, while diesel drivers are forking out 150.39p.
The motoring organisation forecasts that both petrol and diesel prices will fall in the coming weeks, as well as the cost of super unleaded and premium diesel at the pumps.
In response to the Budget date announcement and fluctuating petrol and diesel prices, experts are fearing what could happen if fuel duty returns to its previous level of 57.95p per litre.
Luke Bosdet, the AA's spokesman on pump prices, commented on the future of fuel duty, calling the Budget on October 30 "pivotal".
He said: "Overall, the AA is concerned that current high prices could be made significantly worse with any hike in fuel duty in October.
"In the Spring Budget 2024 it was confirmed that fuel duty will remain frozen for a 14th consecutive year - and the then-Chancellor extended the 'temporary' 5p-a-litre cut for another 12 months.
"If the current Chancellor reverses this it will hit drivers, businesses, and the economy hard."
Speaking previously to GB News, Prime Minister Keir Starmer said that fuel duty is considered to be a "budget-by-budget" issue, but pointed out that Labour had consistently supported measures to keep fuel duty frozen.
Similarly, Transport Secretary Louise Haigh said Labour wanted lower taxes for working people, adding that "nothing in our plans requires us to raise any additional money beyond measures already announced".
The current freeze of fuel duty is scheduled to expire in March 2025, with former Chancellor Jeremy Hunt predicting that it would save the average car driver £50 over the 12 months.
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Former Chancellor Jeremy Hunt extended the fuel duty freeze in March
PAData from the OBR showed that fuel duty receipts resulted in £25.1billion in outturn for the Government in 2022-23, with this expected to rise to £28.2billion in 2028-29.
Many experts have also called on the Government to have a contingency strategy after 2030 when many will be driving electric vehicles and receipts from fuel duty plummet.
Some have suggested the use of road pricing or pay-per-mile car taxes to ensure all drivers pay a fair rate to stay on the road, with certain allowances for rural and low-income drivers.