Motorists are looking at pump prices of 130ppl by the end of the year, according to RMI Petrol. The organisation’s chairman Brian Madderson warned that, while Chancellor George Osborne did not announce any increase in fuel duty in the Emergency Budget on Tuesday, the decision to raise VAT to 20% on January 4 2011 would add to already steep
He added that the decision to keep two more fuel duty hikes planned for October and next January would all help to pile misery on UK drivers.
Madderson said: "With tax bludgeon rather than rapier, the low paid, retirees on fixed incomes, single parent families and rural motorists with limited public transport alternatives are amongst those who will all feel the financial pinch on their fast shrinking disposable incomes."
The Association of Convenience Stores (ACS) had a few words of warning but largely welcomed the emergency budget.
ACS chief executive James Lowman said: "The much expected rise in VAT may be the least bad option for increasing tax revenue but it does present a risk to local shops. It is a great relief that the Chancellor has listened to us and not extended VAT into areas like food and newspapers, such a move would have dramatically increased the cost of goods in convenience stores.
"We also warned the Chancellor not to implement the increase in VAT immediately as this would not allow retailers enough time to change prices on thousands of products. The delay also allows retailers time to sell through products with price marks and avoids the previous error of introducing the change in January.”
The ACS said other positive news included the Chancellor announcing reductions in taxes and national insurance contributions for small businesses plus the reversal of previous increases in cider duty but no further changes to alcohol, tobacco or fuel duty.