Chancellor George Osborne has confirmed that the planned 3p rise in fuel duty this summer has been halted for the remainder of the year. The dramatic U-turn will mean that drivers’ fuel duty costs will now be 10p a litre lower than if the government had forged ahead with the plans.
“We are on the side of working families and businesses and this will fuel our recovery at this very difficult economic time for the world,” said Mr Osborne.
“The one-off cost of this change will be fully paid for by the larger than forecast savings in departmental budgets and we will set out details of those as usual in the autumn statement.”
Last year MPs were told that the 2012 rise in duty would fall from 5p to 3p, and now plans to hike fuel duty rises have been put on hold for a second time, after initially being scheduled for January.
The news was welcomed by Shadow chancellor Ed Balls, who had already called for the rise to be scrapped.
“The government should be giving our economy a boost – not clobbering families, businesses and pensioners just at the wrong time,” he said.
“That’s why Labour is calling on the chancellor to stop August’s fuel duty rise – at least until next January.”
The move marks one of many turnarounds for the coalition government, including changes to charity and pasty taxes.
Leading supermarkets Sainsbury’s and Asda have also announced that they will be supporting motoring budgets by slashing the price of petrol.
Drivers who fill up at one of Asda’s 196 filling stations will pay no more than 127.7p a litre for petrol and no more than 132.7p a litre for diesel. Sainsbury’s also announced that prices for both petrol and diesel would fall “by up to 2p per litre”.
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