Petrol and diesel could rocket up by 12 pence a litre in March if a planned rise in fuel duty comes into force.
The Office for Budget Responsibility (OBD) provides independent analysis of the UK’s finances and has stated in its Economic and Fiscal Outlook for November that ‘the planned 23 per cent increase in the fuel duty rate in late-March 2023’ would add an extra ‘£5.7 billion to receipts next year.’
It added that this would result in a ‘record cash increase’ and the first time that any government has raised fuel duty ‘in cash terms’ since January 1, 2011. The resulting hike in fuel duty would see petrol and diesel prices increase by around 12p a litre which, at current prices according to RAC Fuel Watch, would see petrol rise to 175p a litre and diesel shoot to near the £2-per-litre mark.
RAC head of roads policy Nicholas Lyes: “As things stand, drivers will face an enormous hike in the cost of fuel next Spring due to fuel duty going up. The OBR expects to see 12p added to a litre of fuel, as a result of the current 5p duty cut coming to an end combined with its scheduled rise – something that’s not been seen for over a decade due to duty being frozen in successive Budgets.
“The Government has always made a big deal of cancelling duty rises in the past and will face colossal pressure to do the same next year – after all, a rise of these proportions would heap yet more misery on the millions of households that depend on their vehicles, most of whom will have just endured one of the costliest winters on record.”
A Treasury spokesperson told the PA news agency: “The 23% figure came from the OBR not the Treasury and it’s based on forecasts that are subject to change. We have not announced anything on fuel duty today, the existing 5p cut will remain in place until March 2023 (a tax cut which is worth £2.4bn) and final decisions on fuel duty rates will be made at the Spring Budget.”