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

Fuel prices have risen sharply in recent weeks

The Welsh Conservatives have called for party colleagues in Westminster to cut fuel duty in next week's spring statement.

A spike in world oil prices, prompted by the invasion of Ukraine, has seen petrol and diesel costs spiral.

Senedd Tories said a cut could help protect family budgets, but a motoring group questioned if it would be fully passed on.

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

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

Petrol prices have continued to rise at forecourts despite oil prices having fallen since the spike earlier this month.

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On Wednesday, prices for fuel stood at new records - with an average litre costing 165.40p for petrol and 176.76p for diesel.

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

Despite the fall in oil prices there are concerns about the future of the world's oil supply, with the International Energy Agency warning of a potential "global oil supply shock" from the war and high commodity prices.

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

The Welsh Tories did not specify a figure but called for duty to be lowered as prices increased.

They argued that the increasing revenue VAT generates from rising prices would make up for the shortfall in cash raised by the exchequer.

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

Last week Tory Members of the Senedd (MSs) voted with Labour and Plaid Cymru MSs in calling for more action to bring Ukrainian refugees to the UK.

Peter Fox, finance spokesman and MS for Monmouth, said: "The fight for freedom is not free and we must do our best to insulate the British people from the worst of it. If we do not, we risk losing their support in this generational battle against tyranny.

"The Welsh Conservatives believe that the chancellor's spring statement provides the right opportunity to protect the increasingly tight budget of families and businesses, and this can be done by a progressive cutting of fuel duty."

Any cut to fuel duty would need to be substantial if we are to notice the difference at the pumps.

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

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

But it is in the gift of the chancellor to determine duty 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 statement.

The Welsh Tories are the latest in the party this week to call for a duty cut.

In the House of Commons Tory MP Jake Berry called for a cut to fuel duty, an increase in business mileage rates and a discount to vital fuel users.

Mr Sunak said he would bear the suggestions in mind but said the fall in the price of oil showed the "volatility of the situation we are currently experiencing".

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

"The chancellor might feel that a cut in fuel duty is likely to be lost in what should be a general fall in pump prices," the organisation's Luke Bosdet said.

"Anyway, with the fuel retailers' knack of coming up with reasons to hang on to chunks of potential pump-price savings, there's no guarantee that a reduction in fuel duty would be passed on in its entirety to struggling consumers."

A 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 every time they fill up their tank compared to pre-2010 plans.

"We're providing around £21bn this financial year and next to help families, which also includes cutting the Universal Credit taper rate, freezing alcohol duty and helping households with their energy bills through our £9.1bn Energy Bills rebate."

The Republic of Ireland cut fuel duty earlier this week by 20 cents a litre (17p) for petrol and 15 cents (13p), with the reduction due to be in place until August.