The Budget has brought some relief to the millions of drivers in the UK. A cut in fuel duty by one penny should ease the price of a litre of fuel, though it remains to be seen if this will be passed on by petrol companies on the forecourt.
Chancellor George Osborne has also proposed that fuel duty will be pegged to the rate of inflation if the price of a barrel of crude oil remains high, which is thought to mean above $75 per barrel. It is currently at about $120.
In an unexpected move, the Chancellor scrapped the Fuel Duty Escalator introduced by the previous administration. It has been done away with for the duration of this Government and is replaced by a 'fair fuel stabiliser'.
The fair fuel stabiliser pegs the price of fuel to inflation, though this could see petrol and diesel prices rise by a further 6p per litre in 2012.
Drivers in remote parts of the UK where fuel prices are very high should benefit from the Government applying to the European Union to cut fuel prices by 5p per litre.
Other changes for drivers announced in the Budget include Vehicle Excise Duty (or road tax) will be linked to inflation rates and company car tax rates will rise by one percent for cars emitting between 95- and 220g/km of carbon dioxide.
One piece of good news for all drivers is that the Government has committed a further £100 million to councils for repairing potholes in the wake of the severe winter weather.
Alisdair Suttie - 24 Mar 2011