Hammond poised to hammer motorists’ wallets harder with fuel duty increase

The chancellor of the exchequer has delivered a blow to motorists by suggesting there may be an end to the eight-year freeze on fuel duty soon.

On Tuesday, Philip Hammond hinted in Parliament that fuel duty would be increased in the autumn budget, meaning more bad news for drivers after it was revealed that fuel prices were at a four-year high.

On average, a litre of petrol now costs £1.30, while diesel is £1.34 per litre. That means an average tank now costs more than £70 to fill – up £18 from two years ago and the highest figure since July 2014.

According to official estimates, fuel duty raised nearly £28bn during the 2017/18 tax year. The levy has been frozen at 57.95p per litre for petrol and diesel since 2011.

Raising fuel duty would see opposition from within Hammond’s own party if it went ahead.

One Tory MP certain to object is former government minister Robert Halfon. He has been an advocate of lowering fuel prices in the past and has suggested that a substantial number of Conservative MPs would try to block a fuel duty increase if it were to be tabled in the budget.

In addition, the Democratic Unionist Party – who keep the Conservatives in power – would be unlikely to support it.

Nicholas Lyes, head of roads policy at the RAC, said: “Motorists contribute around £46bn of motoring-related taxation to the Treasury each year, so pay their fair share in tax.

“Pump prices are now at their highest level in four years, and given that drivers are spending around £8 more to fill up their tanks each time they are at a petrol station than they did a year ago, we’d argue that this is not the time to be considering a fuel duty rise.

“It is also important to note that the Treasury has been benefiting from the additional VAT drivers are having to pay as a result of higher fuel prices.”

The date of the budget is still to be decided.