The Chancellor has at long last bowed to pressure from business fleet owners and motorists to reduce the cost of fuel, which has seen a steady and protracted increase over the past year. Coupled with the new higher rate of VAT, this puts fuel prices at a premium.
Of course there are regional differences in the cost of fuel across the UK, with transport costs in rural areas pushing the price up markedly. Wales often has the highest fuel prices for unleaded, diesel and LPG, whilst the Scottish islands has to endure prices which are often 5-10p per litre higher than you would find on mainland UK.
The reduction of duty, which currently stands at 59p per litre, came into effect as of March 23. In a further miniature victory for the motorist, the Chancellor George Osborne has announced the fuel duty escalator which adds 1p to fuel duty on top of inflation every year will be scrapped for the rest of this parliament. However, with the cost of fuel for the average van driver still a major and sometimes crippling concern, the need for cheap van insurance becomes ever more vital.
The Chancellor intends to recoup the money the Government will lose from the fuel duty reduction by making the all powerful oil producing companies pay a Fair Fuel Stabiliser when oil prices rise, in a move which should raise £2bn.
The Fair Fuel Stabiliser was introduced to protect motorists from bearing the brunt of oil price increases at the pumps. The levy is to rise from 20% to 32% on North Sea oil as of March 24.
The AA has welcomed the cut in fuel duty, describing it as: “A much needed tourniquet to drivers haemorrhaging money from record pump prices. This action has probably gone some way to stopping a ‘summer of discontent’ and is a common sense move. A further increase on duty would have bled many drivers on low incomes dry so this action offers some short-term first aid”.
Even with the duty being cut the cost of fuel is still crippling many van drivers, especially those whose vans form the very lifeblood of their business. This makes it all the more important to ensure you receive a cheap van insurance deal, and where better to find yours than at Van Compare.
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