UK Chancellor of the Exchequer Jeremy Hunt has announced a 12-month freeze on fuel duty from April 2023.
The announcement was made as part of Hunt’s Spring Budget, delivered in the House of Commons this afternoon.
Fuel duty was cut by £0.05 per litre in 2022 after the war in Ukraine caused prices to soar. As part of the 2022 Spring Budget, then-Chancellor Rishi Sunak announced that the cut would remain in place for 12 months. Prior to this, the tax had been frozen at £0.58 per litre since 2011.
This goes against previous predictions made by independent bodies. In November 2022, the Office for Budget Responsibility predicted a 23% rise in fuel duty would take effect in April 2023. This rise would have amounted to a £0.12 per litre-increase in the duty.
According to RAC Fuel Watch, average fuel prices currently sit at £1.47 per litre for unleaded petrol and £1.66 per litre for diesel.
Announcing the change/freeze, Hunt said: “I have heard the representations […] of the impact on motorists of the planned 11p rise in fuel duty. Because inflation remains high, I have decided now is not the right time to uprate fuel duty with inflation or increase the duty.
“For a further 12 months, I am going to maintain the 5p cut, and I am going to freeze fuel duty too. That saves the average driver £100 next year, and around £200 since the 5p cut was introduced.”
The move has been met with a mixed response. Craig Mackinlay, Conservative MP for South Thanet, tweeted his approval of the freeze.
.#Budget2023 pleased that #FuelDuty frozen & 5p reduction continues. Great to have a mention by @Jeremy_Hunt #Chancellor who also gives credit to #Fairfuel (@HowardCCox), @pritipatel & Jonathan Gullis.— Craig Mackinlay MP (@cmackinlay) March 15, 2023
However, some are critical, including economist Paul Johnson, who raised concerns about the potential cost to the government at a time of shortages.
Recall that the government has spent months saying it can’t find any money to prevent nurses and teachers getting very big pay cuts. He just found £6 billion to cut fuel duties. That’s a choice.— Paul Johnson (@PJTheEconomist) March 15, 2023