Chancellor cuts cost of fuel by 1p per litre in Budget

The cost of filling up is cut – but will anyone notice?

THE Chancellor George Osborne today bowed to pressure from hard pressed motorists and various campaign groups and cut the fuel duty by 1p per litre from 6pm tonight.
The move has been widely welcomed, although some campaigners have said that there should have been a bigger cut in duty.
George Osborne also deferred the 2011-12 inflation-only increase of 3.02p per litre in fuel duty until January 1, 2012, and the April 2012 increase in fuel duty will now be implemented on August 1, 2012.
The Government has abolished the fuel duty escalator and is to replace it with a fair fuel stabiliser that increases tax on North Sea oil production when oil prices are high – the level at which it will be triggered will be set after discussions with oil and gas companies, and motoring groups.
Although the cut in the cost of fuel may help some drivers, car tax will increase by the RPI Indexation only in 2011-12 and rates for HGVs will be frozen
In a further measure to help motorists who use their cars for work, the Approved Mileage Allowance Payments (AMAPs), which are tax-free and paid to employees who drive their own cars and vans on business trips, will increase from 40p to 45p for the first 10,000 miles from April 6, 2011, but will remain at 25p per mile thereafter.
Company car drivers will see their benefit-in-kind tax rates increase by one percentage point per 5 g/km in 2013-14 with rates for cars emitting less than 95 g/km of CO2 frozen. The fuel benefit charge multiplier used to calculate the tax payable on ‘free’ fuel for company cars will increase from £18,000 to £18,800, but there are no changes in either the van fuel benefit charge or the van benefit-in-kind tax charge for 2011-12.
And finally . . . if you are among the motorists who are fed up with having their teeth rattled and their cars damaged by our badly potholed roads after the worst winter we’ve endured for years, the Government is to provide a further £100-million to local authorities to repair the country’s cratered roads.