Fuel duty cut: campaigners call for 25p reduction to tackle rising cost of living crisis

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Fuel price campaign says immediate cut would ease inflation and accuses retailers accused of “racketeering” as costs remain high

Campaigners have called for the Government to slash 25p per litre from fuel duty to help tackle the cost of living crisis.

FairFuelUK says that such a move would bring the UK in line with several other European countries and help motorists while retailers continue to keep prices unfairly high.

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Fuel duty was cut by 5p per litre in March, taking it down to 52.95p but the campaign group says drivers are still being exploited at the pumps. Prices are between 28 and 35p higher than in late February despite the wholesale cost of oil falling back to similar levels, at $80 per barrel.

Wholesale fuel prices have also fallen continuously for more than two months and although forecourt costs have dropped, the RAC and AA have accused retailers of failing to pass on the full extent of the savings.

Filling stations have been accused of keeping prices unfairly high in recent weeks  (Photo by Finnbarr Webster/Getty Images)Filling stations have been accused of keeping prices unfairly high in recent weeks  (Photo by Finnbarr Webster/Getty Images)
Filling stations have been accused of keeping prices unfairly high in recent weeks (Photo by Finnbarr Webster/Getty Images) | Getty Images

FairFuelUK claims that the Government is “wallowing” in an extra £10 million per day from VAT on overpriced fuel compared to February and families are paying £15 to £20 more to fill up. It argues a further duty cut could help ease soaring inflation.

The latest fuel prices from the Department for Business, Energy & Industrial Strategy show petrol was an average of 177.64p per litre on 8 August and diesel was 188.49p. That is 5.1p and 4.5p cheaper than one week earlier but still 28p and 35p more, respectively, than in February.

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Howard Cox, founder of FairFuelUK said: "The foul stench of profiteering gets even more overpowering. Despite the cost of oil falling 14% since 1 June, pump prices remain stubbornly 6 to 7p higher.

“The Tory Government, stuck in its self-absorbing overlong leadership contest, is allowing the fuel supply chain to ruthlessly exploit UK’s drivers completely unchecked. And the Treasury’s coffers are bulging at the seams with a shed load of extra VAT too."

The UK’s temporary fuel duty cut is among the smallest in Europe. According to research by the RAC, Germany has slashed 25p per litre on the petrol duty and 17p on diesel while Italy has cut duty by 21p on both fuels and several other countries have introduced double-digit reductions.

The latest figures from FairFuelUK show that on 1 August petrol was 35p per litre cheaper and diesel 32p cheaper in Germany and the fuels were 25p and 37p cheaper respectively in Italy.

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An investigation by the Competition and Markets Authority found that the retailers had passed on March’s duty cut but said that there was “cause for concern” over a growing gap in refinery costs which was pushing up prices at the pumps.

It found that the increase from the crude oil price when it enters refineries to the wholesale price when it leaves them as petrol or diesel had jumped from 10p per litre to nearly 35p per litre in the past 12 months.

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