The Chancellor has announced a surprise reduction in fuel duty in today’s Budget, easing the burden of high petrol prices for retailers across the country.
From 6pm today (Wednesday) fuel duty will be cut by 1p per litre, replacing the 1p a litre rise above inflation which was due to kick in next week.
George Osborne also scrapped the fuel duty escalator - which adds 1p to fuel duty on top of inflation each year - while also announcing a fair fuel stabiliser.
Welcoming the decision, ACS chief executive James Lowman said: “The spiralling cost of fuel has already led to over 10,000 petrol stations closing in the last decade. The decrease will give some relief to the thousands of community businesses selling fuel across the country.”
Wholesalers also welcomed the move, which could help prevent price increases in thousands of retailers, according to James Bielby, chief executive of the Federation of Wholesale Distributors (FWD).
“Record fuel prices are already adding further costs to every aspect of the supply chain, from production to delivery,” he said. “As a result, wholesalers’ profit margins are becoming narrower by the day. Shoppers are also feeling the pinch of rocketing prices at the pumps and moderating what they take to the tills as a result.”
Elsewhere, tobacco duty rises will increase by 2% above inflation as previously announced, but there will be no changes to the rate of alcohol duties. But the FWD warned that the duty rises would encourage the black market trade in cigarettes.
The small business rate relief holiday will be extended for another year until October 2012 while banks will increase availability of credit to small businesses by 15%.
On planning, the chancellor announced he would introduce a new presumption in favour of sustainable development, so that the default answer to development is ‘yes’.
But Lowman warned: “Radical changes to planning must not override the ability of councils to plan for sustainable high streets in their areas."
Budget 2011: Tobacco duty rise 'a boon to black marketeers’ (23 March 2011)