Freezing fuel duty will have cost the Treasury £100bn by 2026, the OBR says. While the government's decision will be welcomed by many drivers, environmental campaigners have criticised the move, saying it makes no sense when the cost of public transport is rising.
Fuel duty will remain frozen for another year as increasing the tax 'would be the wrong choice for working people,' the chancellor has said. In her first budget, Rachel Reeves announced the duty will remain at its current rate, which varies for different fuel types. The headline rate on standard petrol and diesel currently stands at 52.95p per litre. This includes a temporary 5p cut introduced by the previous government, which will also remain in place.
Steve Gooding, the RAC Foundation's director, said: 'Tens of millions of drivers will be breathing sighs of relief. 'We shouldn't feel too sorry for the chancellor. She still gets well over half of everything paid at the pumps in a combination of fuel duty and VAT.' Caroline Lucas, the former leader of the Green Party, was among those who criticised the decision.
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