Cost of living: Cut fuel duty, Welsh Tories tell chancellor

The Welsh Conservatives have called on party colleagues in Westminster to cut the fuel tax in next week’s spring declaration.

A spike in global oil prices, triggered by the invasion of Ukraine, has sent gasoline and diesel costs skyrocketing.

Senedd Tories said a cut could help protect family budgets, but a group of motorists questioned whether it would go through entirely.

The UK government said it had frozen fuel tax for 12 years in a row.

Foreign Minister Rishi Sunak will announce his spring statement, like a mini-budget, on Wednesday.

Gasoline prices have continued to rise at gas stations even though oil prices have fallen since peaking earlier this month.

On Wednesday, fuel prices hit new records, with an average liter costing 165.40 pence for petrol and 176.76 pence for diesel.

The AA said it meant that between mid-February and mid-March the cost of filling a typical 55-litre car tank jumped from £81.73 to £90.97.

Despite the drop in oil prices, there are concerns about the future of global oil supply, with the International Energy Agency warning of a possible “global oil supply shock” due to war and high oil prices. raw materials.

Gasoline prices include two taxes. Fuel tax is currently charged at 57.95 per litre, with 20% VAT applied on top.

The Welsh Conservatives did not specify a figure, but called for tariffs to be lowered as prices rise.

They argued that the increased VAT revenue generated from higher prices would make up for the shortfall in cash collected by the treasury.

It is the second time in two weeks that Welsh Conservatives have tried to put pressure on party colleagues in Westminster.

Last week, Senedd (MS) Tory members voted with MS Labor and Plaid Cymru to call for more action to bring Ukrainian refugees to the UK.

Peter Fox, finance and MS spokesman for Monmouth, said: “The fight for freedom is not gratuitous and we must do everything we can to insulate the British people from the worst. If we don’t, we risk losing their support in this generation.” battle against tyranny.

“Welsh Conservatives believe the Chancellor’s spring statement provides the right opportunity to protect the increasingly tight budget of households and businesses, and this can be achieved through a progressive reduction in fuel tax.”

Any fuel tax cut would have to be substantial if we want to see a difference at the pumps.

Despite the wholesale cost of petrol falling last week, prices have continued to hit record highs with some filling stations charging £2 a litre.

If the daily rise in prices continues, cutting fuel tax by a couple of pence would make little difference to the bills families and businesses face when they fill up the tank.

But it is in the chancellor’s gift to determine the tariff and VAT on fuel, and with pressure from politicians and the public, it is a lever he may be tempted to pull during the spring declaration.

The Welsh Conservatives are the latest in the party this week to call for a tax cut.

In the House of Commons, Conservative MP Jake Berry called for a reduction in fuel tax, an increase in business mileage rates and a discount for vital fuel users.

Sunak said he would take the suggestions into account, but said the drop in oil prices showed the “volatility of the situation that we are currently experiencing.”

The AA warned that a fuel tax cut may not be fully felt by consumers.

“The chancellor might feel that a fuel tax cut is likely to be lost in what should be an overall drop in pump prices,” said the organization’s Luke Bosdet.

“However, with the ability of fuel retailers to find reasons to hold on to potential savings at the pump price, there is no guarantee that a reduction in fuel tax will be passed on in full to consumers. in a hurry”.

An HM Treasury spokeswoman said: “To keep costs down, fuel duty has been frozen for the 12th year in a row, which will save drivers around £15 each time they fill up compared to pre-2010 plans.

“We’re providing around £21bn this financial year and next to help families, which also includes reducing the Universal Credit reduction rate, freezing the alcohol tax and helping households with their energy bills.” through our reimbursement of £9.1 billion in energy bills.”

The Republic of Ireland cut fuel duty earlier this week by 20 cents per liter (17 pence) for petrol and 15 cents (13 pence), with the cut running until August.