Fuel Duty: March 2022

Dear Constituent,

Thank you for contacting me about fuel prices.

Conservative governments have frozen fuel duty for twelve consecutive years. In recognition of the unprecedented circumstances pushing up fuel prices, this week the Chancellor cut fuel duty by 5 pence for a full year – only the second cut in twenty years, the largest ever cut across all fuel duty rates, and a new tax cut itself worth £2.5 billion, adding up to over £5 billion together with the cost of the duty freeze. Together with the freeze, this will save car drivers £100, van drivers £200, and HGV drivers £1,500 this year.

The decision to freeze fuel duty for the twelve consecutive years prior to this cut had already saved the average driver over £1,900 compared to the pre-2010 escalator.

I also welcome that for the first time since 1926, money raised through car tax (Vehicle Excise Duty) is now being spent directly on the roads. Around £28bn is being invested in England's strategic and local roads, an amount equivalent to all VED receipts.  I was also very pleased to see the announcement in the Spending Review that £1.7 billion has been made available for local highway authorities in England (outside London) for 2021-2022 to improve the condition of local roads and associated infrastructure.

Finally, while I am aware of the arguments in favour of introducing an independent pump pricing watchdog, I do not believe such a move is necessary. The most effective way to keep fuel prices down is through an open and competitive market. In 2013, the Office for Fair Trading investigated competition in the UK fuel sector and concluded that it was operating well. It should be highlighted that the Government works with numerous stakeholders to ensure that the fuel industry is competitive and has sought to assist in other ways as set out above.

Thank you again for taking the time to contact me.


Richard Fuller