Get rid of 5p fuel duty cut, RAC tells chancellor

A 5p cut on fuel duty should be scrapped in the upcoming Budget, according to the RAC motoring organisation, because drivers are not gaining any benefit.

The RAC has claimed that retailers have failed to pass on lower petrol and diesel prices to motorists and instead have boosted their own profits.

Simon Williams, head of policy at the RAC, said Chancellor Rachel Reeves "knows the 5p discount is losing the Treasury £2bn a year".

Ms Reeves will set out Labour's first Budget on 30 October, which Prime Minister Sir Keir Starmer has warned "will be painful".

Fuel duty has been frozen since 2011 but in 2022 the then Conservative chancellor Rishi Sunak cut it by 5p per litre. That was extended until March next year.

The UK's competition watchdog recently found that drivers were still paying too much for fuel, costing them £1.6bn in 2023.

Consequently, the RAC said it had reached the conclusion that Ms Reeves "has no option but to put fuel duty back up".

“We’d normally be against any increase in duty," said Mr Williams. "But we’ve long been saying drivers haven’t been benefitting from the current discount due to much higher-than-average retailer margins."