Industry organisations have responded with anger and disappointment to chancellor George Osborne’s refusal to freeze fuel duty.
As a result, fuel duty will rise in August by 3.02p per litre. This could take the price of diesel up to £1.50 per litre. The price of petrol could go up to 145p a litre.
Vehicle excise duty is to be frozen for commercial vehicles.
FTA’s Chief Economist Simon Chapman says: “The Chancellor has squandered a very real pportunity to support UK industry, jobs and economic recovery, by his Budget policy on fuel duty… the fuel duty increase of 3p per litre scheduled for August will increase the average cost of lorry operation by around £1,200 per vehicle per year – all on top of other price rises which are inevitable as a consequence of the current and anticipated increases in the world price of oil.
“Higher commercial vehicle operating costs inevitably impact on the price of everything we use or consume, and contribute to inflation and higher consumer prices.
“Mr Osborne has lost an opportunity to benefit every household in the UK and he must be persuaded to change his policy. FTA cannot accept this situation and will join with colleagues in the FairFuelUK Campaign with the intention of reversing this decision.
“In addition, the much heralded Fair Fuel Stabiliser has emerged as a damp squib. All it does is to formalise fuel duty increases above inflation if world oil prices fall below $75 per barrel. At the very least, what he should have done was to commit to freezing fuel duty when world oil prices were above $100 per barrel.”
RHA chief executive Geoff Dunning said: “The Chancellor’s decision to go ahead with this rise is not only disappointing, the reason behind it is hard to understand.
“In the last Budget, the Chancellor seemingly understood the need to stop driving up fuel taxes and he actually cut duty. This time, he seems to have done a complete U-turn. We are struggling to achieve any growth and pump prices have reached record highs – yet he is driving fuel costs even higher.
“Diesel fuel is now the most expensive it has ever been – the RHA’s weekly fuel price survey last week hit an all-time record high – and yet the Chancellor will be driving costs up by another £1,200 a year for a large truck – costs that hauliers must now set about trying to recover from their hard-pressed customers.”
Quentin Willson, national spokesman for FairFuelUK said: “In failing to act on petrol and diesel prices the government has turned its back on families and businesses all across the country. This ignores three quarters of the electorate who want lower fuel prices. It ignores the threat of rising global oil prices – even the Saudis are trying to pull down the price of crude.
“And it ignores robust research we gave to the PM showing that cutting duty will create jobs, improve GDP and cost the Treasury absolutely nothing. This is a mortal wound for this Government’s policies and its credibility. We showed them that cutting fuel duty by 2.5p would create 175,000 new jobs – how many jobs will be destroyed when the Government slaps 16p per gallon on in August?”