Government retains freeze on fuel duty

Company cars

Budget 2016: Fuel duty is to remain frozen at 57.95p a litre for 2016-17.

This is the sixth consecutive year that the government has retained the freeze on the rate of fuel duty.

The continued freeze was announced by Chancellor George Osborne during his Budget 2016 speech today (16 March).

Osborne said: “In the last twelve months, petrol prices have plummeted. That is why we pencilled in an inflation rise. But I know that fuel costs still make up a significant part of household budgets and weigh heavily on small firms.

“Families paid the cost when oil prices rocketed; they shouldn’t be penalised when oil prices fall. So I can announce that fuel duty will be frozen for the sixth year in a row.

“That’s a saving of £75 a year to the average driver; £270 a year to a small business with a van. It’s the tax boost that keeps Britain on the move.”

Ashley Barnett, principal consultant at Lex Autolease, added: “The Chancellor’s decision to prolong the tax duty freeze for a sixth year has clear benefits for British businesses as many continue to feel the positive impact of lower costs at the pump. The falling cost of fuel had prompted speculation about an imminent rise in duty, but businesses can breathe a sigh of relief, for now at least.”

Ashley Sowerby, managing director at Chevin Fleet Solutions, said: “The fleet industry will give a collective sigh of relief that fuel duty will be frozen once again, something that seemed certain to rise according to all of the pre-Budget recovery.

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“Apart from that, there seems to be little in the Chancellor’s statement of interest for those operating cars and vans except for the welcome infrastructure expenditure on roads and halving of the Severn Crossing tolls.

“The real story, we believe, lies in the bigger picture, that the economy is now not expected to do as well as forecast just a few months ago even if it remains relatively stable. This will mean that fleet managers will come under renewed pressure to keep a tight rein on costs and ensure that they are getting maximum productivity out of their vehicles and drivers.”