Budget 2010 Set To Increase Petrol Prices

Budget 2010 VAT Petrol Price IncreaseUK motorists are set to face yet another hike in petrol prices following this week’s Budget announcement.

The 2010 Budget is expected to see a rise in VAT, follows the news that the coalition agreement have subsequently dropped previous pledges to help motorists.

Going in to the election the Liberal Democrats promised to cut fuel duty in rural areas to aid families who rely on cars due to poor public transport.

With the Conservative party pledging to introduce a “fuel price stabiliser” that would cut duty when oil prices soar.

Sadly it appears that both pledges have been quietly sidelined.

Ahead of this week’s 2010 Budget, motoring groups are calling on the government to offer a lifeline to struggling motorists.

John Franklin, a spokesperson for the RAC said:

Both the Conservative Party and the Liberal Party went into the election with proposals that were intended to help motorists.

The Conservatives were going to consult on a fuel duty stabiliser and the Liberals were going to cut fuel duty in rural areas.

However neither proposal was mentioned in the coalition manifesto which only suggests that the ‘war on motorists’ will continue unabated.

The simple way to help motorists would be to stop the planned fuel duty rises in October and January as this will once again hit family budgets hard.”

At present the average UK petrol prices are 118.1p a litre, up 16 percent from 102.2p in 2009. This equates to an extra £8 a week cost for the average two car family.

Although the new Transport Secretary Philip Hammond promised to “end the war on motorists”, this week’s Budget is expected to contain yet more bad news for drivers.

A VAT increase of just 1% would nudge the average UK petrol price up to 119.1p a litre, which in effect would cost the average motorist an extra £13 a year.

And should VAT increase by 2.5%, the average UK pump price would hit 120.6p, an additional £33 a year.

If that wasn’t enough, insurance premium tax could also see an increase from its current rate of 5%.

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