Will fuel duty freeze save you money?

The government announced some much-needed relief for hard-pressed motorists in yesterday’s Budget - extending the freeze on fuel duty to July. But how much of a difference will that make?

Yes, it’s good to see the chancellor trying to reduce travel costs for households that rely on their cars, particularly those travelling to work.

But drivers have seen the cost of petrol and diesel rise at an alarming level since the US-Iran war began in February and sent oil prices shooting up.

So while this measure does help in some small way, it can’t completely insulate motorists from soaring prices at the pumps.

High fuel prices forcing drivers to make cutbacks

One consequence of rising forecourt prices is that people are having to make tough financial choices.

In fact, two-thirds (65%) of motorists are cutting back on other spending because of the high cost of fuel, according to an RAC poll.

That’s up from 61% in April.

And the same survey showed that among those who have no choice but to use their vehicles, the number struggling to cope with the costs has risen from 39% to 47%.

“A freeze only avoids making an already difficult situation worse,” said RAC senior policy officer Rod Dennis.

“It doesn’t make filling up any cheaper.

“And it’s worth remembering that pump prices still soared this summer, despite fuel duty being at this very same reduced rate.”

Soaring fuel prices pushing up the cost of living

It’s no surprise that so many motorists are having to make cutbacks elsewhere, but it’s a reminder of how petrol and diesel prices don’t just affect people with a car.

When the cost of fuel goes up, the cost of delivering and transporting goods goes up too.

And some businesses can only absorb these higher prices by passing them on to their customers.

In other words, prices will go up in the shops.

So it won’t just be drivers hoping that the situation in the Middle East will improve, that oil prices will return to normal levels and that the supply situation gets better.

It affects each and every one of us.

Check our money saving ideas

Keep checking back here for our regular tips on how to cut costs at home and behind the wheel, such as:

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• 50 ways to cut your fuel costs
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• How to make your money go further