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Key questions answered on the fuel duty freeze

Key questions answered on the fuel duty freeze

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The Chancellor of the Exchequer, Rishi Sunak, announced that fuel duty in the UK would be frozen as part of the 2020 Spring Budget.

The Chancellor of the Exchequer, Rishi Sunak, announced that fuel duty in the UK would be frozen as part of the 2020 Spring Budget.

But what does that mean for UK drivers and how will affect your vehicle running costs? Here are nine questions answered that should help clear that up.

What is fuel duty?

Fuel duties are additional costs on top of the true price of fuels, such as petrol and diesel. They’re a form of tax that is then used by the Treasury in the government to help fund the maintenance of the road network.

How much is it?

57.95p per litre of petrol or diesel is taken for fuel duty  – with this figure remaining the same for the next financial year.

When was it last changed?

Fuel duty has remained at its current level since March 2011.

Why did the Chancellor decide to keep it at this level?

Chancellor Rishi Sunak said he was “mindful of the fiscal cost and the environmental impacts” of fuel duty, but acknowledged that “many people still rely on their cars”.

How much is fuel duty worth to the Treasury?

In 2019/20 alone, it’s forecast by the Office of Budget Responsibility that fuel duty will raise £28.4 billion for the Treasury – a figure that’s not to be sniffed at.

How much does it affect the price of a litre of fuel?

As of Monday 9 March, the average litre of petrol cost £1.22, while an average litre of diesel cost £1.26. That means fuel duty makes up around 45 per cent of every tank each time you fill up at the pumps.

Are there any other taxes in place?

Yes. VAT is also included when motorists buy fuel, which is charged at a rate of 20 per cent.

What do motoring groups think about fuel duty?

FairFuelUK, a campaign looking to get better fuel price for UK drivers, says the UK already has the highest fuel taxes anywhere in Europe, which have a “huge impact on the cost of living for ordinary families’ finances”.

What do environmentalists think?

Friends of the Earth, a worldwide network of environmental organisations, stated that the Chancellor should have used the opportunity of this budget to raise fuel duty and help tackle climate change in the UK.