In late March, chancellor Rishi Sunak announced a 5p-per-litre cut in fuel duty, to last 12 months, in an effort to reduce prices at the pumps. But the measure has been widely condemned as a failure, having not compensated for sustained price increases as a result of the war in Ukraine and other external factors.
In a statement, the Petrol Retailers Association explained: “Forecourts have passed on this cut; consumers have not felt it at the pumps because prices have since risen. Forecourts have also had to contend with recent cost-of-living increases, such as increases in electricity costs and in the National Minimum Wage.
Indeed, Antoniazzi was quick to condemn the existing measures: “When the Chancellor set out a cut of 5p per litre in his spring statement, we did not think it would make much of a difference. It has not even scratched the surface. In fact, last week there were newspaper reports of this cut barely being passed on to the customer at the pumps.”
On 26 separate days so far this year, said the SNP’s Patricia Gibson, a new record for petrol and diesel costs has been broken. She went on to explain that consumers currently pay more than 80p in tax on every litre of fuel, and criticised the government for maintaining current VAT rates: “The Treasury is raking in 20% of the total cost at the forecourt, with fuel price increases bringing in additional VAT, amounting to billions of pounds, all of which is helping to accelerate inflation.
“As the cost of fuel has risen, so has the VAT being raked in by the Treasury—vast additional revenue for the Chancellor.”
A cut in VAT would be more effective than slashing fuel duty, she said, because that tallies with the total cost of petrol and diesel, rather than the fixed 50p per litre duty cost.
“The dithering and delay must end. Halving VAT on fuel will have an immediate and positive impact.”
Responding to MPs on behalf of the government was Exchequer Secretary to the Treasury Helen Whately, who acknowledged the concerns of UK motorists: “I represent a rural constituency, and I know that for most people in my constituency, there is no alternative to going by car for most journeys. As hon. Members have said, whether it is getting to work, doing the school run, going to the supermarket, the doctor or the dentist, or visiting family, there is usually no alternative.