Fuel duty will remain frozen, Osborne confirms

Chancellor George Osborne has announced that fuel duty will remain frozen for the sixth year in a row, as part of the 2016 Budget.

Fuel duty makes up the biggest component of the price of diesel and petrol and has been held at 57.95p per litre since the March 2011 Budget.

Leading up to the Budget, it was expected that Osborne would opt to increase the fuel duty, but, after facing opposition from Conservative Party backbenchers, the Chancellor announced that it will be kept frozen, which is expected to save the average motorist around £75 over the next year and the average small business around £250.

On top of the fuel duty freeze, Osborne also announced that petroleum revenue tax for oil producers will be ‘effectively abolished’, as well as a 50 per cent tax reduction on oil for producers, which could have a knock on impact to the price of fuel in the near future.

While this is likely welcome news to fleet operators, falling petrol prices and the freeze on fuel duty is likely to keep combustion engine vehicles an attractive option. This, paired with recent reductions to the Plug-in Car Grant, could potentially impact the large growth currently taking place in the alternatively fuelled vehicles sector.

Read more