Rishi Sunak’s 5p cut to fuel duty in March has had little impact as UK fuel prices have surged to historic highs, according to RAC Fuel Watch. Since the policy was announced the price of diesel has increased by almost 6 per cent to 188.05p a litre, while petrol has risen by 11 per cent to 182.31p a litre.
Filling a 55l family car with diesel now costs a record high of £103.43 and the average cost of a tank of unleaded petrol is £100.27. The RAC also expects average fuel prices to reach £2 a litre in the next few months, driven by the increasing demand for oil as China eases its Covid restrictions and the peak summer driving season across the United States and Europe. “These are unprecedented times,” said Simon Williams, an RAC spokesman. “Sadly, it seems we are still some way from the peak.”
Campaigners warned that a 5p fuel duty cut would do little to benefit the country’s poorest from the intensifying cost-of-living crisis. Analysis by the New Economics Foundation, a think tank, showed that just 7 per cent of the benefit of the fuel duty cut goes to the poorest fifth of households, while a third goes to the wealthiest fifth. In absolute terms, it would be worth £90 a year to the poorest tenth of households, compared with £580 for the richest tenth.