Fuel prices need ‘urgent review’
- 13 June 2022
- Posted by: Alan Feldberg
- Category: News
The RAC and the AA have backed calls from government ministers for an urgent review of rising fuel prices.
They want to establish if the cut in fuel duty is being passed on by retailers to drivers.
This comes after petrol prices reached a record high on Sunday of 185p a litre, despite wholesale petrol prices falling.
According to the RAC, the average price of petrol rose 11p in May, the second largest increase ever seen. The average price of diesel meanwhile rose by 5p to a new record price of 183p per litre.
RAC fuel spokesman Simon Williams said: “With drivers facing such a dire situation on the forecourts we badly need further intervention from the Chancellor as households and businesses surely can’t take much more financial pain in conjunction with the horrendous hikes in gas and electricity.
“Something needs to be done, whether that’s a further cut in duty from the current 53p charged on every litre bought at the pumps, or a reduction in VAT from 20%. Arguably, a duty cut would make a bigger difference to both businesses and individuals, but it also seems very unfair that the Treasury is benefitting to the tune of 30p a litre in VAT revenue from the record high prices – as it’s effectively a tax on a tax, applied on top of the wholesale fuel cost, duty, delivery and retailer margin. the challenges drivers are facing, a VAT cut would be instant and wouldn’t be swallowed up by fluctuations on the wholesale market.”
Business Secretary Kwasi Kwarteng has now asked the Competition and Markets Authority to look at whether the 5p cut in fuel duty is being passed on to drivers.