UK fuel prices drop as duty hike is anticipated

Petrol and diesel prices in the UK have reached their lowest levels in nearly three years, with petrol averaging 139.5p per litre and diesel at 144.2p per litre. This decline comes just before the anticipated introduction of a fuel duty increase, marking the first rise in 14 years. The Labour government is expected to reverse the previous Conservative government's 5p duty cut, which was implemented in 2022, as part of a broader strategy to address a significant budget deficit. The AA attributes the current low prices to a decrease in global oil markets, where Brent crude prices have fallen from over $80 a barrel to $73. However, the motoring group has expressed concerns that fuel retailers have not adequately passed on these savings to consumers. Edmund King, president of the AA, emphasized that the recent price drop is primarily due to the 5p fuel duty cut, warning that its removal could severely impact low-income drivers. The RAC has predicted that the 5p cut will likely be scrapped, a move that could affect millions of motorists, particularly those with lower incomes. Critics of the previous fuel duty policies, including the Social Market Foundation, argue that the freeze and cut disproportionately benefited wealthier individuals, costing the Treasury approximately £100 billion since 2011. As the government prepares for a challenging autumn budget aimed at addressing a £22 billion shortfall, the potential fuel duty increase is seen as a necessary step. However, this decision raises concerns about the financial burden it may place on low-income drivers, who are already struggling with rising living costs.