The PRA has written to the Chancellor urging him to not just freeze, but cut fuel duty by 5ppl in the Autumn Budget on November 22.
Since the beginning of October, the Platts wholesale cost of petrol has risen by more than 6ppl. This has resulted from the price of Brent Crude oil recovering to more than $60 per barrel, while at the same time sterling has weakened against US dollar.
Over the same period Experian Catalist research shows average pump prices across the UK have dropped by 1ppl indicating that there is as much as 7ppl gap that needs to be bridged between now and Christmas.
PRA chairman Brian Madderson commented: “Following yesterday’s interest rate increase by the Bank of England, consumers will now be caught with higher living costs which can only mean a reduction in household expenditure. This spells real trouble for the economy going forward.”
The PRA points out in the letter that the Treasury has a financial model, launched in 2014, that concludes fuel duty cuts ultimately increase tax revenue by stimulating other parts of the economy. At a recent meeting between PRA and senior officials of the Treasury and Revenue & Customs, their model was confirmed as still being valid.
“The 5ppl duty cut would be a bold but vitally important concession by the Chancellor if he has any desires to see the UK economy hold fast as we head into 2018, particularly against the backdrop of uncertain Brexit negotiations. This is a must do action,” concluded Madderson.