British drivers are bracing for potential financial pain at the pumps as the Labour government prepares its Autumn Budget, with warnings emerging that the long-standing fuel duty freeze could be scrapped.
Budget Announcement Could Bring Fuel Duty Increase
Chancellor Rachel Reeves is set to unveil the government's Autumn Budget on Wednesday, November 26, with motoring organisations expressing serious concerns about potential changes to fuel duty. The current 5p fuel duty cut, introduced in March 2022, faces uncertainty as the new government reviews its fiscal options.
Jack Cousens, head of roads policy at the AA, highlighted the precarious situation: "The recent increase in pump prices has put the national averages for petrol and diesel on a knife-edge that could see them return to the record levels of pre-Covid if the 5p fuel duty cut is cancelled in this month's Budget."
Postcode Lottery Compounds Driver Woes
Making matters worse for motorists is what the AA describes as a "pump-price postcode lottery" where drivers in certain towns pay significantly more for fuel than their neighbours in adjacent areas.
"Some of that extra fuel cost is being generated by the persistence of the pump-price postcode lottery, where local rivals match each other's prices in a cosy relationship that leaves drivers in the 'wrong' towns paying £2 to £4 more for a tank of fuel," Cousens explained.
This geographical disparity means that motorists who fill up their vehicles twice weekly could face additional costs of £8 per week, accumulating to a staggering £416 annually for those consistently caught in higher-priced areas.
Wider Economic Impact Feared
Edmund King, AA president, emphasised that the consequences of scrapping the fuel duty freeze would extend far beyond individual motorists. "Scrapping the 5p freeze in fuel duty would hurt everyone, not just drivers," he stated.
"Everything from the price of food in supermarkets to the delivery of social care within our communities are impacted by pump prices, and an unnecessary hike in fuel duty could make things worse."
King further noted that household budgets are already stretched and highlighted that even households without cars benefit from suppressed fuel duty through cheaper bus fares and more affordable supermarket goods.
Call for Price Transparency
The AA has advocated for greater transparency in fuel pricing to protect consumers. "The best way to ensure fair pump prices is to complete the initial good work of the Competition & Markets Authority (CMA) to legislate that all fuel retailers must publish their prices," King asserted.
While acknowledging that some fuel retailers collect "higher than necessary profits," the AA president also recognised that "most small and independent forecourts are struggling to keep their heads above water compared to 2017."
The Department for Energy Security and Net Zero has confirmed that its Fuel Finder initiative remains "on track," potentially offering some relief to motorists seeking the best local prices once implemented.
