Shelve fuel duty hike, urges Britain’s AA

The AA urged the British government to shelve next month’s hike in fuel duty after warning that motorists face a new upswing in pump prices.

The motoring organisation said plans to add one pence to petrol and diesel prices from October 1 come at a time when the cost of crude oil and a weaker pound threaten to put additional upward pressure on motoring costs. January’s increase in VAT to 20 per cent is set to compound the misery for motorists.

While the AA said average UK pump prices fell for the fourth month in a row during the last month, its latest fuel price report found that drivers were still paying £4.36 a tank more for petrol than a year ago.

AA president Edmund King said the nine pence to 10 pence increase in petrol and diesel prices had landed the government with a VAT windfall of at least one pence a litre.

“For that reason, the duty hike could be shelved to help economic recovery, ahead of the 2.5 per cent VAT increase next year.”

The wholesale cost of petrol has risen by around two pence a litre since mid August and the AA said speculators threaten to increase oil prices to the level that lifted UK petrol prices to May’s record high of 121.61 pence a litre.