Hard-up car owners will welcome news that the planned 3p rise in fuel duty for August has been cancelled by the Government.
Petrol prices hit a record high in March this year of more than £1.40 a litre and although costs have been coming down in recent weeks, they still remain significantly high.
With the Chancellor, George Osborne, coming under increasing pressure to cancel the planned increase in fuel duty and the economy still struggling, it was always going to be a unpopular decision to go ahead with the fuel cost rise. The Government has also said there will be no further fuel duty increases this year.
Transport secretary, Justine Greening, has been putting pressure on the fuel retailers to pass on the cuts in wholesale fuel prices to motorists much more quickly. The move, however, was seen by some as trying to pass the blame and deflect attention away from the Government’s planned duty hike.
At the end of May, Ms Greening pointed to the fact that while wholesale prices had fallen 10p per litre for unleaded on average, forecourt prices had only fallen 7p per litre on average since April.
The Department of Transport stated that the industry would have to come up with its own code of conduct to ensure any fall in wholesale prices are passed on to the motorist within a fortnight. If it didn’t the Government would consider legislation to force it to do so.
This latest move now means the fuel duty rise originally planned for August 2012 won’t come into effect until January 2013.
In the meantime, car buyers can look to lower fuel costs by shopping around. Asda and Sainsbury’s for instance, recently announced a cut in petrol prices of up to 3p per litre.
Parkers top tip:
To see whether you are better off buying petrol or diesel, use the Parkers Cost of Motoring Tool to see which is the most cost effective.
