Associations representing the forecourt trade and drivers have welcomed the announcement that duty on fuel will be frozen for a further year.
Speaking at the Conservative Party Conference in Birmingham, the Prime Minister said: “Some have wondered if there would be a thaw in our fuel duty freeze this year. Today I can confirm that in the budget later this month, the chancellor will freeze fuel duty again.”
Chancellor Philip Hammond said: “This has come at a significant cost to the Exchequer, but the high oil price and the near-record pump price of petrol and diesel are also imposing a significant burden on motorists.
“So we have decided that to support hardworking families, we will once again freeze fuel duty in the upcoming budget.”
PRA chairman Brian Madderson said the decision was not unexpected. He commented: “With external market factors already pushing up the price of fuel, increasing the price further would be unacceptable.”
He said that the PRA had been briefing the Treasury and HM Revenue & Customs (HMRC) telling them “now is not the time”.
“We said to HMRC, ‘How dare you think of increasing duty when you are not collecting tax from the unregulated hand car wash sector?’”
Research suggested the unregulated hand car wash sector was avoiding paying £1.5bn in tax, said Madderson. He added: “Rather than going for an easy target like increasing duty they should be bringing in tax that is due. This would help both legitimate businesses and the Exchequer.”
RAC fuel spokesperson Simon Williams said: “We are pleased the Prime Minister has listened to the RAC and millions of motorists by freezing fuel duty for another year. Drivers are currently paying the highest prices at the pumps for four years.
“While there is a silver lining in the form of no rise in fuel duty, darker clouds in the form of higher wholesale costs may well be passed on to drivers at the pumps imminently, so it would have been foolhardy for the Treasury to opt to punish drivers further.
“Motorists can breathe a sigh of relief for now, however it is a shame that each year motorists have to worry whether the Government is about to hit them harder in their pockets.”