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Motoring news

Motorists face Darling's 'fuel duty bombshell'

23/04/2009

Motorists face significantly higher fuel costs in the next 12 months, after the chancellor announced surprise tax increases in yesterday's Budget.

Fuel duty will rise by 2p a litre from September, and then by a penny more than inflation in April for the next four years.

Taking into account the 2p-per-litre increase that came into effect at the beginning of this month, and the return of VAT to 17.5% at the end of this year, the AA calculates that total fuel taxation is set to increase by around 8p per litre in little more than a year - equating to around £200 on the average two-car family's annual fuel bill.

The AA's president, Edmund King, called the news a "fuel duty bombshell" that was designed to pay for the £300 million 'cash-for-bangers' scrappage scheme, and which came at a time when retail pump prices are rising again.

And Prof Stephen Glaister of the RAC Foundation said that the announcement worsened the "already grossly disproportionate tax burden on drivers", saying that it would hit increasing numbers of poor and elderly people who rely on a car.

However, the duty increases were welcomed in some quarters.

Stephen Joseph of the Campaign for Better Transport said that it was right for taxes to target pollution, but that the resulting revenue should be used to improve alternatives to private transport.

"Money from fuel and aviation tax increases should be used to cut public transport fares and invest in improvements ? these would help people to green their travel and create jobs now," he said.