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August fuel duty hike scrapped

The Government has delayed the planned three pence per litre fuel duty hike until January 2013

Petrol station

The Government has scrapped the three pence per litre (ppl) fuel duty hike that was scheduled for August. The remarkable u-turn follows months of pressure from campaign groups, motoring organisations and MPs, who argued that motorists could not afford such an increase.

Chancellor George Osborne said the move – which will cost the Treasury an estimated £500 million – would be paid for from savings generated from the Coalition Government’s previous spending cuts. 

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He said: “We are on the side of working families and businesses and this will fuel our recovery at this very difficult economic time for the world.

“The one-off cost of this change will be fully paid for by the larger-than-forecast savings in departmental budgets.”

The move only offers a six-month respite for motorists, though, as Osborne said the 3ppl hike will go ahead in January 2013, instead.

RAC Foundation director Professor Stephen Glaister said: “This is good news for drivers and good news for the country. Given that tax makes up around 60% of the pump price, falls in the price of oil were only ever going to go so far in easing the financial burden on motorists.”

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