The fuel levy was not mentioned by chancellor Jeremy Hunt in his autumn statement earlier, but the budget watchdog’s paper says it assumes there will be an increase in the spring. The “planned 23% rise” would likely see the price of petrol and diesel rise by around 12p/litre, the OBR said, boosting government coffers by £5.7bn. It would be the first time a government has increased cash fuel tax since January 2011. Tory MP Jonathan Gullis – who wants fuel duty to be cut further – has written to the chancellor, calling on him to “listen to motorists, lorry drivers and truckers, who are already suffering from extremely high taxation” and show them that the Government “it actually has its back by keeping the price down.” Fair Fuel UK founder Howard Cox said the ‘bombshell’ had been ‘stolen’, adding: ‘Needless to say I’m loading both barrels to fight this tooth and nail.’ Fuel duty has been frozen at £52.95 a liter since 2011 and was cut by £5 a liter in the spring statement last year, a measure which will expire at the end of March. The 23% figure comes from factoring in the forecast for RPI (retail price index) inflation next year and the assumption that the 5p cut will end. Read more: Key announcements from Autumn Statement Exciting change from Jeremy Hunt – analysis Pound falls as markets and businesses respond to Autumn Statement RAC head of road policy Nicholas Lyes: “As things stand, drivers will face a huge increase in fuel costs next spring due to the increase in fuel tax. “The OBR expects to see 12p added to a liter of fuel as a result of the current 5p cut in duty being completed in conjunction with its planned rise – something not seen for over a decade due to the freeze in duty on successive budgets. “The government has always canceled many duty hikes in the past and will face enormous pressure to do the same next year – after all, an increase in these rates would heap even more misery on the millions of vehicle-dependent households, most of which will just endure one of the costliest winters on record. “Instead, we are calling on the government to focus on developing a fair tax system that can eventually replace fuel tax, which is effectively on borrowed time given the number of zero-emission vehicles on the road that pay no fuel tax at all. “ The OBR’s warning comes just a day after 23 Conservative MPs – including former Home Secretary Priti Patel and former Northern Ireland Secretary Brandon Lewis – wrote to the chancellor, calling on him to cut fuel tax. Speaking after the Autumn Statement, Tory peer Craig Mackinlay said: “It would be beyond ridiculous to give a generous rise in benefits and pensions just to take them away in an inflation-busting fuel tax hike.” A Treasury spokesman said: “The 23% figure came from the OBR, not the Treasury. It is based on forecasts which are subject to change. “We have not announced anything on fuel tax today – the existing cut of 5 per cent will remain in place until March 2023 (a tax cut worth £2.4bn) and the final decisions on fuel tax rates will be made in spring budget”.
