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1p petrol duty cut wiped out

Fuel prices up by £0.02p a litre since the Budget

Petrol pump

The 1p cut in fuel duty was a headline announcement in the 2011 Budget

The 1p per litre reduction in fuel duty announced by chancellor George Osborne in the recent Budget has already been wiped out, says the RAC.

According to its figures, the average cost of a litre of petrol is now 133.55p – £0.02p higher when compared with the average price on March 23 when the duty cut was announced. Motoring groups RAC and the AA have also warned that petrol prices could reach as high as £1.50 a litre by Christmas.

RAC strategist Adrian Tink said: ‘The volatile oil market has meant that drivers have seen very little benefit from the duty cut. Prices are continuing to spiral upwards with no end in sight.’

Petrol prices rising

When the chancellor announced the 1p cut in fuel duty, he also declared the fuel duty escalator cancelled for the rest of this Parliament, with the planned 4p per litre rise to be delayed until 2012. The new ‘fair fuel stabiliser’ will be funded by increasing the supplementary charge on North Sea oil and gas production from 20% to 32%.

Read the Which? Money guide to 7 ways to save money on petrol for top tips on how to cut the cost of fuel.

Save on fuel costs

New research from Which? has found that shopping around for fuel could save you more than £200 a year, after an investigation into how petrol prices vary across thousands of UK stations. We found that supermarket brands were generally cheapest – especially Asda. Meanwhile, on average, BP was the most expensive place to fill up.

Use the Which? fuel calculator to calculate your car’s true miles-per-gallon and journey costs, and get advice on finding the cheapest fuel in your area.

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