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<\/picture><\/span>Image source, <\/span>Getty Images<\/span><\/div>\n<\/figure>\n<\/div>\nA possible increase in fuel duty would see petrol prices rise by about 12p a litre.<\/b><\/p>\n<\/div>\n<\/div>\n The increase is pencilled in for April 2023, according to the Office for Budget Responsibility (OBR).<\/p>\n<\/div>\n<\/div>\n Fuel duty is a tax motorists pay when buying fuels such as petrol and diesel.<\/p>\n<\/div>\n<\/div>\n It could go up by 23% in April, according to the OBR, which provides independent checks of the government’s economic plans.<\/p>\n<\/div>\n<\/div>\n That would be “the largest rise in the fuel duty rate in history”, it said.<\/p>\n<\/div>\n<\/div>\n The 12p per litre rise across petrol and diesel prices would be expected to bring in about \u00a35.7bn in extra taxes.<\/p>\n<\/div>\n<\/div>\n Chancellor Jeremy Hunt said the government has not made a decision to hike fuel duty.<\/p>\n<\/div>\n<\/div>\n He said that “is not government policy” and that the Treasury would “make a decision on that at the next Budget in the spring”.<\/p>\n<\/div>\n<\/div>\n Speaking after the fuel duty rise was included in the OBR’s review of the government’s Autumn Statement, he said: “That was just an assumption that the OBR made.”<\/p>\n<\/div>\n<\/div>\n So, it is still possible the duty could be frozen or go up by a different amount.<\/p>\n<\/div>\n<\/div>\n In theory, fuel duty should go up every year.<\/p>\n<\/div>\n<\/div>\n However, in March, Rishi Sunak – who was chancellor at the time – used the government’s Spring Statement to cut the tax, following concerns about rising prices.<\/p>\n<\/div>\n<\/div>\n Fuel duty on petrol and diesel was reduced by 5p, from 58p to 53p, for 12 months.<\/p>\n<\/div>\n<\/div>\n The OBR’s statement assumes that 5p cut will end as planned in March.<\/p>\n<\/div>\n<\/div>\n It has also factored in a scheduled rise of 7p on top of that.<\/p>\n<\/div>\n<\/div>\n However, chancellors do not always go ahead with increases to fuel duty.<\/p>\n<\/div>\n<\/div>\n Before Mr Sunak reduced it, the tax had been frozen since 2011.<\/p>\n<\/div>\n<\/div>\n Fuel duty goes into the government’s general spending pot.<\/p>\n<\/div>\n<\/div>\n And it’s a big money-spinner, tending to raise about \u00a328bn a year.<\/p>\n<\/div>\n<\/div>\n The Treasury said the 5p cut introduced in March would cost the public purse \u00a32.4bn in 2022\/23.<\/p>\n<\/div>\n<\/div>\n For 2022-23, the OBR expects fuel duties to raise \u00a326.2bn in total.<\/p>\n<\/div>\n<\/div>\n There’s also a question mark over how the government will make up the shortfall in the tax as more people start to drive electric cars.<\/p>\n<\/div>\n<\/div>\n However, the Treasury will also start charging vehicle excise duty on them from 2025.<\/p>\n<\/div>\n<\/div>\n Petrol and diesel prices have been on a rollercoaster ride this year.<\/p>\n<\/div>\n<\/div>\n Recent data puts petrol at an average of 164p per litre on UK forecourts. <\/p>\n<\/div>\n<\/div>\n That’s a few pennies below the level it was at the Spring Statement when fuel duty was cut.<\/p>\n<\/div>\n<\/div>\n A wide gap has opened up between petrol and diesel, which is now at an average of 188p – about 8p higher than in March. <\/p>\n<\/div>\n<\/div>\n After the fuel duty cut in March, prices came down a bit – only to shoot up to record highs in the summer.<\/p>\n<\/div>\n<\/div>\n They then fell back, and are currently on a downward trend.<\/p>\n<\/div>\n<\/div>\n Fuel prices in the UK move together with changes in the price of crude oil – which it is made from.<\/p>\n<\/div>\n<\/div>\n They are also affected by the exchange rate between the pound and dollar, as crude oil is traded in dollars. A weaker pound means fuel gets more expensive.<\/p>\n<\/div>\n<\/div>\n Prices were rising before Russia’s invasion of Ukraine, but the fallout made fuel more expensive.<\/p>\n<\/div>\n<\/div>\n Russia used to be one of the world’s largest oil exporters, but that was before punishing sanctions were imposed by the West.<\/p>\n<\/div>\n<\/div>\n The US has banned all imports of Russian oil. The UK is phasing it out, and EU sanctions will block most Russian oil imports after 5 December.<\/p>\n<\/div>\n<\/div>\n<\/div>\nHow much is fuel duty expected to go up by?<\/span><\/h2>\n<\/p>\n
Will the increase go ahead?<\/span><\/h2>\n<\/p>\n
What has happened to fuel duty in other years?<\/span><\/h2>\n<\/p>\n
What does fuel duty pay for?<\/span><\/h2>\n<\/p>\n
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What is happening to petrol prices?<\/span><\/h2>\n<\/p>\n
What do petrol prices have to do with the war in Ukraine?<\/span><\/h2>\n<\/p>\n