Motorists face rise in petrol cost

The UK Government's upcoming increase in fuel duty and VAT means motorists will get no relief from record petrol prices in the coming days.

With the Government increasing fuel duty on January 1, the price of a litre of petrol and diesel will go up by 0.76p.

Pump prices will go up further on January 4 when the Government increases VAT to 20%.

Professor Stephen Glaister, director of theRAC Foundation, said: "It is a bleak mid-winter for motorists with already record petrol prices set to rise significantly with the fuel duty and VAT increases. And that won't be the end of it with more increases in fuel duty already scheduled for April.

"Given that each penny increase in fuel duty raises about an extra £500 million for the Exchequer, it is easy to see why the Chancellor is tempted to hike rates. But if the nation's 34 million motorists are pushed too far they will drive less and the Treasury could actually see their tax take fall. At the election there was much talk about a fuel duty stabiliser. Drivers will rightly be wondering what happened to that idea."

The Freight Transport Association (FTA) said the fuel duty rise on January 1 would leave the freight industry "with a £95 million hangover".

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