Spring Statement: Rishi Sunak announces 5p cut to fuel duty until March 2023
Cut will take effect from 6pm tonight, chancellor says
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Your support makes all the difference.Rishi Sunak has announced a 5p cut per litre to fuel duty until March 2023, saying it represents the “biggest cut to fuel duty rates ever”.
After pressure to alleviate the cost-of-living crisis, the chancellor said the government would for the second time in 20 years cut fuel duty.
“Not by one, not even by two, but by 5p per litre. The biggest cut to all fuel duty rates - ever,” he told MPs during the spring statement.
The chancellor added: “While some have called for the cut to last until August, I have decided it will be in place until March next year - a full 12 months.
“Together with the freeze, it’s a tax cut this year for hard-working families and businesses worth over £5 billion, and it will take effect from 6pm tonight.”
Figures from data firm Experian Catalist show the average cost of a litre of petrol at UK forecourts on Tuesday was 167.3p, while diesel was 179.7p. This is an increase of 18.0p per litre for petrol and 27.0p for diesel over the past month.
But the Petrol Retailers Association said the 5p reduction was “not comprehensive enough to reduce the burden on motorists”.
They added: “Other European countries have gone further: for example, Ireland has cut duty by 17p, leaving our members in Northern Ireland are at a competitive disadvantage as they are unable to compete with prices across the border.
“Oil prices have risen again today, meaning that rising prices will see the 5p cut cancelled out almost immediately. While the Chancellor was speaking, the price of Brent Crude went up by $6 a barrel.”
The chancellor also told MPs that VAT would be reduced from five per cent to zero on materials such as solar panels and heat pumps, saying: “A family having a solar panel installed will see tax savings worth over £1,000. And savings on their energy bill of over £300 per year”.
His announcements came after he said the Russian invasion of Ukraine – alongside UK government sanctions on Vladimir Putin’s regime – are not “cost-free for us at home” and present a “risk” to the recovery.
He said the Office for Budget Responsibility (OBR) has recognised there is an “unusually high uncertainty around the outlook”, adding: “It is too early to know the full impact of the Ukraine war on the UK economy.
“But their initial view, combined with high global inflation and continuing supply chain pressures, means the OBR now forecast growth this year of 3.8%.
“The OBR then expect the economy to grow by 1.8% in 2023, and 2.1%, 1.8% and 1.7% in the following three years.”
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