This week motorists have been warned that the cost of their bills could almost double as the cost of diesel hits record prices because of the current war in Ukraine.
A House of Commons Treasury Committee heard that fuel prices will continue to skyrocket, with some predicting that the cost of diesel could hit £3 per litre if the Chancellor doesn’t step in.
The news comes as Rishi Sunak prepares to address the growing cost-of-living crisis in the spring budget. Many Tory MP’s have pressured the Chancellor to cut fuel
duty to help alleviate the cost of driving.
Despite this pressure, the Chancellor has revealed very little; however, should the price of fuel continue to rise as predicted, the Chancellor’s hand may be forced, and he will need to take action.
Development in Ukraine first sparked the rise in petrol and diesel and have been compounded by Prime Minister Boris Johnson’s order to end all Russian imports of oil by the end of the year. Johnson’s commitment to end oil and diesel imports will place a significant strain on British supplies as 18% of its diesel is imported from Russia.
Nathan Piper, head of oil and gas research at Investec, has told MPs, “This is going to be a cost-of-living crisis for people for a long time to come.”
Meanwhile, Simon Williams from the RAC commented, “Our calculations show Rishi can afford a 5p-a-litre cut in fuel duty – thanks to the extra money being made from the VAT element which is slapped on top of the pump price.”
Meanwhile, some economists have predicted that Germany will likely have to ration diesel supplies by the end of the month. Amrita Sen has suggested that similar actions may need to be taken in the UK.
For the latest news and analysis of the ongoing energy and fuel crisis, follow the Reduce My Costs blog.
