1p Per Litre Cut in Fuel Duty Announced

Chancellor George Osborne announced a 1p per litre cut in fuel duty in response to a recent surge in global oil prices, effective from 1800GMT.  He also said he would cancel a fuel duty escalator that would have pushed fuel costs higher. An inflation-linked rise in the fuel duty planned for next week was delayed until next year. “It’s about doing what we can to help with the high cost of living and the high cost of oil,” the chancellor said.

The fuel duty escalator was initially introduced by the previous government, Mr Osborne pointed out. “The fuel duty escalator, that adds an extra penny on top of inflation every year, will be cancelled,” he said, “not just for this year, or next year, but for the rest of this Parliament”. Under the old system the fuel duty would have risen by the rate of inflation, plus 1p per litre. Instead, the fuel duty will fall by 1p per litre.

“We will delay the inflation rise in duty planned for next week until next year – and also delay the April 2012 inflation rise until the following summer.”

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Article Source, BBC News, 23rd March 2011, 14.27.

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