Calls to cut VAT on fuel as petrol price predicted to hit £1.60 a litre

Matt Allan
By Matt Allan
Published 9th Mar 2022, 09:31 BST
Updated 9th Mar 2022, 09:34 BST
(Photo by Christopher Furlong/Getty Images)(Photo by Christopher Furlong/Getty Images)
(Photo by Christopher Furlong/Getty Images)
Chancellor urged to act as prices rise at fastest rate for almost 20 years

The Government has been urged to cut VAT on petrol and diesel as prices reached new record levels.

Motoring group the RAC predicts that petrol could hit an average of £1.60 per litre before the end of the week and diesel could exceed £1.65.

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It has called on Chancellor Rishi Sunak to implement an immediate 5% cut on the tax to ease pressure on households and businesses facing spiralling costs.

The average price of a litre of petrol is now 156.37p, according to the RAC’s Fuel Watch service, with diesel averaging 162.28p.

Filling stations in some areas are already charging more than £1.60 per litre (Photo by OLI SCARFF/AFP via Getty Images)Filling stations in some areas are already charging more than £1.60 per litre (Photo by OLI SCARFF/AFP via Getty Images)
Filling stations in some areas are already charging more than £1.60 per litre (Photo by OLI SCARFF/AFP via Getty Images)

VAT makes up around 16% of the price of a litre of fuel and the motoring group’s fuel spokesman Simon Williams said a cut in VAT from 20% to 15% would save drivers more than 6p per litre at current prices.

He commented: “Another day of record average pump price highs is putting petrol on a rapid journey towards 160p a litre and diesel to 165p. Given the speed of increases, drivers could unfortunately see this by the end of the week. And as these are averages far higher prices will be appearing on forecourt totems up and down the country.

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