Prime Minister Rishi Sunak has refused to rule out an 12p-per-litre increase in fuel duty next year.
Sunak said he would not comment on matters which are the responsibility of Chancellor Jeremy Hunt when questioned on the reported hike in tax on petrol and diesel.
According to Office for Budget Responsibility forecasts, drivers face a 23% increase in duty next March unless Hunt follows his predecessors in freezing the levy for another year. The figure is based on a combination of the end of the temporary 5p per litre reduction announced in March 2022 and the long-standing policy of increasing the duty in line with RPI inflation.
Asked on Tuesday to confirm that the rise will not go ahead, the Prime Minister told MPs he would not comment on matters which are the responsibility of the Chancellor. He told the Liaison Committee: “Having previously had his job, I always preferred it when the Prime Minister made absolutely no comments about future tax policy, so I will absolutely adhere to that.”
Treasury Select Committee chairwoman Harriett Baldwin told the Prime Minister that should the increase predicted by the OBR go ahead it would mean extra taxes of “£6 billion a year during a cost-of-living crisis”, and said there was a need for a “better approach to fuel duty”.
Mr Sunak said: “Tax decisions are those that are made by the Chancellor in fiscal statements and that’s the way it should be.”
Fuel duty is currently 52.95p per litre after Sunak cut it by 5p in March 2022 while Chancellor in an effort to combat spiralling fuel costs. That reduction is due to end in March 2023. If the OBR forecast is accurate, the levy will jump to around 64.95p per litre.
However, it is unclear whether Hunt will go ahead with the increase. For the past 12 years Chancellors have consistently kept duty frozen at 57.95p per litre and the Treasury insists that no final decision will be made until the next budget, which is scheduled for March 15.
Despite the cut in fuel duty in March, petrol and diesel prices continued to soar to new record levels until July. They have since fallen back but, according to some observers are still artificially high, with drivers paying an average of 152.96p per litre for petrol and 175.75p for diesel.