Get ready to head to the gas station and fill up your tank before the upcoming Budget on October 30th, as industry commentator Jan Mikula predicts that the Chancellor will likely raise fuel duty. Various interest groups are already lobbying the new Chancellor to make decisions in their favor as she prepares to deliver her first Budget speech in the House of Commons.
The Petrol Retailers Association is advocating for the current freeze on fuel duty for road fuels to be maintained, but the likelihood of an increase is high due to the precarious state of UK public finances. With demands for increased government spending across various sectors and limited revenue sources, the Chancellor may see a fuel duty increase as a viable option, especially since she has ruled out raising VAT, Income Tax, or National Insurance.
Interestingly, fuel prices have been decreasing, with unleaded petrol dropping below 130p per liter and diesel below 140p per liter. This unexpected decline is attributed to a global decrease in oil demand, particularly from China. The Chancellor may see this as an opportune time to increase fuel duty, as it could generate additional revenue for the Treasury, especially considering the stable inflation rate in the UK.
Raising fuel duty could also be a strategic move to support environmental initiatives, such as promoting electric vehicles (EVs). Despite the potential impact on fuel sales revenue, increasing EV adoption is crucial for addressing long-term environmental concerns. While consumers may feel the pinch of higher fuel prices initially, it could align with the government’s green agenda and provide a boost to the EV market.
As a consumer, you may want to consider topping up your tank before the Budget to potentially avoid higher fuel prices. Fuel retailers, on the other hand, could capitalize on the situation by stocking up before any duty increase, potentially leading to increased profits in early November.
In conclusion, the decision on fuel duty in the upcoming Budget is crucial for both consumers and businesses in the fuel industry. Stay informed about the potential changes and plan accordingly to mitigate any financial impacts.
