Hunt ‘wants to extend 5p fuel duty cut another year’

The Chancellor is reportedly planning to extend the 5p fuel duty cut for another year if the economic outlook improves. Jeremy Hunt wants to extend the reduction in the

price of petrol and diesel in his spring budget if public finances allow, The Times reports. There are concerns that imposing additional costs on drivers would be “toxic”

and there is a “strong precedent” for freezing fuel duty. The Treasury is also facing pressure to freeze fuel duty for another year. If both measures go ahead it would cost

the Government an estimated £6 billion. “Hunt doesn’t want to do anything that stokes inflation,” a friend of the Chancellor told The Times. Then-chancellor Rishi

Sunak announced the 5p fuel duty cut in March 2022, saying it represented the biggest cut ever, following a rise in pump prices after Russia’s invasion of Ukraine. In

December, Tory MPs warned Mr Sunak that raising fuel duty by 12p would be “political suicide” with Britons already suffering with the cost-of-living crisis. The prime

minister had been examining ways to get more money into government coffers and has refused to rule out the hike in the budget in March. A Centre for Economics and Business

Research (Cebr) report warned such a rise could push up inflation by more than 2 per cent, wipe 1 per cent off GDP and cause 31,000 job losses. Meanwhile, Conservative MPs

feared that a significant fuel duty rise would dent the party’s chance of regaining ground on Labour. The RAC and AA have been pushing for an extension to the 5p cut beyond

March due to the continued high pump prices and the cost-of-living crisis.