Car Insurance

Budget 2012: Osborne disappoints motorists over fuel price increase

The chancellor looks to be on a collision course with motoring groups after he would not drop intentions to introduce a 3p a litre petrol price increase set to kick forecourts in August.

Despite oil prices hitting $125 a barrel, and the expense of unleaded petrol required to exceed 1.40 a litre now, George Osborne chose never to help hard-pressed motorists by using a further duty cut.

Osborne, who scrapped the annual fuel tax escalator and cut fuel duty by 1p in the March 2011 budget, said fuel would’ve been 6p a litre higher in price had he not taken his previous action.

He told the House of Commons he’s got eased the responsibility for the motorist by 4.5bn and said fuel duty probably would not rise faster than inflation, unless oil prices were to fall below 45 a barrel C around 1 / 3 of the current worth of crude oil.

In the runup on the budget, various motoring groups had campaigned for the further duty cut arguing that record high petrol prices were using a disastrous affect on individual household budgets additionally, the economy generally.

Since March 2010, the asking price of petrol has risen 23.24p a litre or almost 20%. For your family with two petrol cars, the monthly fuel bill has risen 50 in the last Year or so.

AA president Edmund King described the chancellor’s deficiency of action being a “budget blow-out” that can force drivers off the road.

“We have often heard much about tax allowances but the improvement in fuel duty could not make any allowance for car-dependent, rural and disabled drivers. Only the other day the number one minister told American students that UK fuel prices is likely to make them “faint”, however the government seems set on inflicting more pain without gain on drivers. Ironically, this type of hike in duty no help government finances as men and women will cut spending along at the pumps plus in shops, but it could fuel inflation,” he was quoted saying.

The RAC predicted that petrol prices is possibly above 150p a litre by August should the planned 3p a litre increase becomes effective. With VAT added, pump prices will rise 3.62p a litre

“Drivers are increasingly being hit by record fuel prices each day with no symptom of it ending. That was the opportunity to conduct the right thing for motorists who pay around 45bn a year in motoring taxes C instead he’s given them more pain for the pumps,” said a spokesman.

Osborne also announced that vehicle excise duty (VED) C road tax C will rise in line with inflation, besides for lorry operators in that case it will probably be frozen.

He said the federal government is considering letting drivers spread the cost of buying their tax disc over a while paying by direct debit.

In some other move, the chancellor defied a sustained campaign from the aviation industry whilst announced an 8% rise in air passenger duty will go ahead on 1 April.

Aviation industry officials say raising duties could hurt the economy while it forced passengers to protect yourself from great britain.

Chief executives Carolyn McCall of easyJet, Willie Walsh of International Airlines Group, Michael O’Leary of Ryanair and Steve Ridgway of Virgin Atlantic, who led the opposition to the surge in duty, responded inside of a statement.

“At a time when the costa rica government covers creating jobs and growth, its blinkered insistence on further increases in air passenger duty achieves the opposite,” the trainer told us.

The Airport Operators Association said united kingdom already provides the highest aviation taxes in Europe. “This new increase will hit the tourism industry and needlessly jeopardise the recovery of your economy generally,” it said.

Also buried inside budget supplements was news that from April 2013 the CO2 emissions threshold with the main rate of capital allowances for company cars will fall from 160g per km to 130g from April 2013, affecting mid-sized cars as well as gas guzzlers.

Employees with company cars will be hit when the top rate of company car tax for any highest-emitting cars will rise from 35% in the list price in the car to 37% in 2015. But employees performing a diesel car might benefit C from 2016 the 3% diesel supplement for the calculation of their total tax charge might be removed, reducing their tax bill.

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