Jeremy Hunt must keep fuel duty frozen in his Budget
Since 2010, FairFuelUK has been instrumental in influencing over twelve years of fuel duty freezes. For example, they have successfully pushed for a 1p cut in 2011 and 5p cut in 2022. Last year, we were very pleased to have been asked by the fantastic Howard Cox, founder of FairFuelUK, to be their ambassador. We also praise Express readers who have helped support British motorists since 2010. But while Conservatives have cut fuel taxes, our 37 million motorists still remain one of the highest-taxed drivers in the world.
That’s why we’ve asked the Chancellor of the Exchequer and Prime Minister to make sure their fuel duty remains frozen – and the 5p cut is kept – to support the nation’s motorists and economy.
Without the Government committing to freezing fuel duty, the OBR forecasts a potential 23 percent increase in fuel duty. According to a report from the CEBR, this could add 2.3 percent to inflation, hold GDP down by 1 percent and put 31,000 jobs at risk. So freezing fuel duty should be a no-brainer for a Government committed to halving inflation and growing the economy.
But it’s not just on fuel duty we need to see action taken. The Government must intervene to protect households and businesses from big fuel companies profiteering. Between October 10 and December 8, 2022, we saw petrol prices fall by just 3 percent whilst the price of wholesale petrol dropped by 22 percent. Importantly for many businesses, it is significantly worse for diesel.
Despite diesel prices barely changing at the pumps, wholesale prices have plunged by 25 percent. Crucially, this means that the price differential between petrol and diesel jumped an astonishing 400 percent. Looking back over a longer period. In the last six months retail petrol has fallen 25 percent yet its wholesale price dropped more by 41 percent. Diesel fell less at the pumps by 12 percent even though its wholesale price reduced by 27 percent. Those falls on the wholesale price are not being passed onto hard-pressed families and businesses. Had pump prices fallen at the same rate as wholesale levels petrol would be at the pumps 10p-14p lower and diesel 20p lower. That means for an average family car fill up, there could have been a saving of over £6 for petrol and £11 for diesel. Just imagine how much lower inflation could be if consumers and businesses felt the full benefits of the wholesale price drops.
Instead, the fuel giants are pocketing record profits. From 2015 up until 2020 average profit per litre for petrol and diesel was about 8 to 9p. However, from 2020 petrol profit has doubled to around 19p per litre and diesel has more than doubled to 24p per litre. So while Shell is expected to announce a record $40bn net profit for 2022 next year, double the previous year, our constituents continue to struggle to pay to fill up their vehicles.
That is why we are campaigning with Howard Cox for PumpWatch – a regulator, with legislative powers, to ensure motorists are not exploited.
Most importantly, they will ensure there is fairness and transparency, putting the 37 million motorists in this country first. We have written to both HM Treasury and the Department for Business, Energy and Industrial Strategy outlining the proposals, and we are pleased to have the support of over 30 MPs. We are adamant that PumpWatch will cut through the opaque complexities of pump pricing and ensure our 37 million motorists will have absolute fairness, transparency, and honesty in how prices are set at the pumps.
It is vital that we keep Britain moving. Small businesses and good hardworking people rely on their vehicles every day. Whether that is an electrician driving from house to house or a café making deliveries locally, as Conservatives we need to make sure people are not punished for going about their lives. A PumpWatch regulator and a freeze in fuel duty would be a welcome boost for our country’s 37 million motorists.
That is why we urge the Government to put Britain’s hardworking motorists first.
Priti’s comments in the Daily Express, Tuesday 7th February 2023.