Drivers who fill up at Tesco, Asda, Sainsbury’s, and Morrisons have been given a nine-week warning of a potential price hike in fuel as the Labour Government’s first Budget approaches. The Chancellor is expected to speak on Wednesday, October 30, concerning the predicted increase in petrol and diesel costs. This anticipation follows Prime Minister Sir Keir Starmer’s mention of a £22 billion deficit in the public funds, prompting concerns about fuel duty rise.
The RAC has highlighted the likelihood of a 5p per litre increase in fuel duty in the upcoming Budget. This move comes after a 5p discount was implemented by the previous Conservative government in 2022, which had frozen fuel duty at 57.95p since 2011. The RAC’s head of policy, Simon Williams, stated that the Chancellor “has no option but to put fuel duty back up to 58p a litre in October’s Budget.” Williams emphasised the financial strain caused by the discount and the excessive charges on drivers.
With the increasing presence of electric vehicles on the roads, the RAC suggests transitioning to a pay-per-mile system instead of fuel duty. This change would significantly impact retailers’ pricing strategies, potentially leading to fairer costs for consumers. The RAC advocates for retailers to adjust fuel prices to reflect lower wholesale costs, proposing a reduction from 142p per litre to 136p for petrol and 147p per litre to 139p for diesel.
Overall, the RAC’s call for retailers to align prices with wholesale costs and the impending fuel duty rise indicate changes on the horizon for drivers across the UK. These developments are set against the backdrop of the upcoming Budget announcement, raising important considerations for both consumers and policymakers in the fuel industry.