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16 May 2022

Diesel prices hit new record high despite fuel duty cut

Diesel prices hit new record high despite fuel duty cut

Diesel prices have soared to a new record high despite the cut in fuel duty, figures show.

The average cost of a litre of the fuel at UK forecourts on Monday was 178.4p, according to Government data.

The previous record of 177.5p was set two days before Chancellor Rishi Sunak implemented a 5p per litre cut in fuel duty on March 23.

Analysis by the PA news agency revealed that filling up a typical 55-litre family diesel car is around £26 more expensive than a year ago.

This is due to a 48p per litre rise in average prices.

Petrol prices have nearly returned to the level seen before the duty cut.

The average cost of the fuel was 163.7p per litre on Monday, compared with 165.4p on March 21.

Steve Gooding, director of the RAC Foundation, said: “As we feared, it didn’t take long for the 5p reprieve to be swallowed up by global events which are driving pump prices back towards record levels.

“The Chancellor can’t be blamed for the soaring cost of oil but he could and should go further in cutting the rate of duty.

“Whilst all the attention is on the price of a barrel of Brent crude, the Chancellor continues to quietly take in taxation only just less than 50% of everything that drivers pay on the forecourt.

“There has been a lot of criticism of the windfall profits being made by companies like BP and Shell, but let’s not forget that record oil prices are also bringing in extra for the Treasury in the form of VAT which is levied not just on the product price of petrol and diesel, but also the duty element.”

VAT is charged at a rate of 20% of the combined product price and duty.

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