Fuel Costs To Jump In The Spring

Tue 22nd Nov 2022

Drivers are being warned to brace for further sharp rises in petrol and diesel prices in the spring, with a delayed impact of the autumn budget meaning that fuel duty rises will send costs rocketing.

A 12 pence-a-litre hike in fuel duty is planned for March and The Office for Budget Responsibility (OBR) provides independent analysis of the UK’s finances and has stated in its Economic and Fiscal Outlook for November that ‘the planned 23 percent rise in fuel duty in late-March 2023 would add an extra £5.7 billion in receipts next year.’

The association said that fuel duty would be raised by £1200 million in cash terms, resulting in the greatest cash increase in any government since January 1, 2011. According to RAC Fuel Watch, the resulting hike in fuel prices would see petrol rise to 175p per litre and diesel approach £2 per litre, current prices notwithstanding.

“As things stand, drivers will face an enormous hike in the cost of fuel next Spring due to fuel duty going up,” said Nicholas Lyes, Head of Roads Policy for the RAC.  “The OBR expects to see 12p added to a litre of fuel, as a result of the current 5p duty cut coming to an end combined with its scheduled rise – something that’s not been seen for over a decade due to duty being frozen in successive Budgets.

“The Government has always made a big deal of cancelling duty rises in the past and will face colossal pressure to do the same next year – after all, a rise of these proportions would heap yet more misery on the millions of households that depend on their vehicles, most of whom will have just endured one of the costliest winters on record.”

Despite the warnings, the government argues that the OBR report is only based on predicted costs, and that the true costs are yet to be determined. Speaking to the PA News Agency, a Treasury spokesperson said: “The 23% figure came from the OBR not the Treasury and it’s based on forecasts that are subject to change. We have not announced anything on fuel duty today, the existing 5p cut will remain in place until March 2023 (a tax cut which is worth £2.4bn) and final decisions on fuel duty rates will be made at the Spring Budget.”