Fuel tax unlikely to rise

The Government is expected to continue the freeze on fuel duty in this week’s Budget.

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The Government is expected to continue the freeze on fuel duty in this week’s Budget.

By keeping tax at current levels, instead of increasing it in line with inflation, Chancellor Gordon Brown would save motorists around one penny per litre. The current level of fuel duty is likely to continue until the next review in the autumn.

This would be the second year of a fuel duty freeze and the Chancellor is expected to use the high price of crude oil as justification. However, as this is the last Budget before the general election, rivals may criticise it as a bid to win votes.

The RAC Foundation has called upon the Government to continue the tax freeze to help UK motorists. The RAC estimates that low-income households already spend up to 24% of their income on motoring.

The executive director of the RAC Foundation, Edmund King, said: ‘Fuel duty is a regressive tax, which hits those hardest who can least afford it. Freezing the level of fuel duty would help the Government to regain the confidence of the motorist.’