The Chancellor has cancelled January’s 3ppl fuel duty rise following pressure from the Petrol Retailer’s Association, Fairfuel UK and other lobby groups. The increase planned for April 1, 2013 will be deferred until September 1, 2013.

ACS chairman James Lowman said: “The Chancellor’s decision to cancel the planned 3ppl fuel duty increase will provide a much needed lifeline for forecourt retailers and will keep costs down for all retailers whose delivery and wholesale costs are significantly affected by the price of fuel.”

The AA said the Chancellor’s decision to cancel the January 1 fuel duty hike avoided a New Year’s headache and a long hangover for all drivers and was very much welcomed by the AA.

“Big Ben’s chimes ringing in a nearly £2-a-tank hike in petrol and diesel prices would have backfired on the Government and economy,” says Edmund King, the AA’s President

“The Treasury may have thought that a fuel duty increase in the winter, when petrol is usually cheaper, would have been easier. But, toasting the New Year with champagne at a lower duty rate than road fuel underlines successive governments’ failure to spot the difference between a luxury and a necessity.

“In 20 years, UK motoring has cut its fuel consumption by 20% (12.8 billion litres), but contributes 144% more (£15.81 billion) in fuel duty tax. In the last financial year, The Treasury collected its second highest-ever haul of fuel duty from UK drivers - a whopping £26.8 billion. That is two and a half times more than what is spent on UK roads (£9.8 billion), even before receipts from Vehicle Excise Duty, VAT, company car tax and new car tax are added.”

The AA believes that, if the Chancellor wants to beat his record fuel duty haul of £27.26 billion (2010/11), the Government should tackle the inflated pump prices that are driving lower-income motorists off the road and cutting contributions to the Treasury.

The proposed 3p litre fuel duty hike would have added almost £2 a tank for the average car filling up, and £2.50 for ‘Mondeo Man’.

The AA has told the Chancellor that already 73% of drivers are cutting back on spending, journeys, or both due to the high cost of fuel (AA Populus poll).

Edmund King, AA President, said “Drivers in the UK have followed Government advice to purchase more fuel efficient vehicles. It is remarkable that fuel consumption has fallen 20% in two decades. However, drivers are contributing 144% more (£15.81 billion) in fuel duty tax so it is good news that drivers aren’t be stung again in January.”

Jeremy Symonds, chief executive of Forecourt Trader of the Year winner Symonds Forecourts, said: “I am absolutely delighted, particularly because it has not just been delayed but it has been scapped. It is good news for petrol retailers and for consumers.

“For petrol retailers it is definitely the right outcome, because the sheer amount of duty already is more than enough.

“For consumers times are tough, and January would have been the worst time for a duty increase as they were counting the cost of Christmas.

"The PRA and its chairman Brian Madderson deserve credit for the hard work they have put in on this issue.”

Phill Jones, commercial director of Motors.co.uk, said: “Our recent survey indicated that up to 5.7 million motorists (17% of those surveyed) would no longer be able to afford to keep their cars on the road if their weekly petrol bill increased by £10. I am sure I am not alone in heaving a sigh of relief at the news that Mr Osborne has cancelled next month’s proposed 3p per litre hike in fuel duties. For an average family, using 200 litres of fuel per month, this rethink has averted a price increase of around £6, which would have added £72 to an annual family budget. That has to be good news for drivers and the motor trade alike.”

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