Government To Perform U-turn On Fuel Duty Increase
Tiger.co.uk, the website which encourages motorists to compare car insurance quotes to save money, can report that the Chancellor of the Exchequer, George Osborne, has confirmed that the planned increase in fuel duty in the UK has been delayed until January 2013.
The Government had intended to add 3p per litre to fuel duty in August 2012 but has now decided to delay the increase until January 2013, meaning that British motorists can enjoy lower prices for the next six months. Any financial benefit provided for motorists, however temporary, is welcome as the high cost of living in general is placing many families and businesses in a precarious financial situation.
Average fuel costs have been in steady decline since April this year. Only two months ago the average price of petrol was £1.42 per litre and diesel was a staggering £1.48 per litre, according to the Department of Energy and Climate Change. Current fuel prices are lower, with the average cost of petrol at £1.31 and diesel at £1.37 according to petrolprices.com. The Government sees the decision to delay the increase in fuel tax as another positive step for the UK economic recovery with George Osborne ironically commenting: “This will fuel our recovery”.
Major UK supermarkets such as Tesco, Sainsbury’s, Asda and Morrisons are fiercely competing with each other when it comes to prices at the pump, either by dropping prices or offering money-off coupons if customers spend a certain amount in store. This has created a price war between the retail giants to the general benefit of the motorist.
The recent decision to delay the increase in duty could spark further campaigning and opposition in January when the next increase is planned, especially if wholesale oil prices continue to fall. Moneycontrol.com can report that the price per barrel of crude oil is currently US$79 whereas only two months ago it was as high as US$106 per barrel. Many commentators maintain that the fuel prices at the pump are not reflecting changes in wholesale oil prices.
Andrew Goulborn, Commercial Director of car insurance comparison site Tiger.co.uk commented:
“This is a welcome relief for all motorists in the UK, particularly as we approach the summer holidays when many motorists take to the road. Our Tiger Watch price monitor report earlier in June highlighted a reduction in motor insurance premiums prices and this, combined with lower fuel prices, will this certainly help all of us in the coming months. Car insurance and fuel are two main running costs for motorists and any reduction in either will help.