Motoring groups today praised Rishi Sonak’s announcement of a cancellation of the planned fuel duty increase, calling it’some relief to hard-pressed drivers’.

However, the Chancellor’s decision not to raise it to 57.95p per litre for petrol or diesel, as it has been over the past 11 years, comes as record-breaking prices continue to rise. 

Yesterday, petrol hit a new record high of 143.48p per litre, with diesel at 146.89p – far above pre-Covid levels of 122p for petrol and 125p for diesel, which were falling.

The 21p difference on petrol includes 3.5p extra in VAT, which is more than the 2.84p scheduled increase in fuel duty – so Mr Sunak is still taking more tax from drivers.

After intense lobbying from Conservative MPs, he put the levy in the Budget on hold for the 12th time. Boris Johnson is still trying to get world leaders committed to climate change targets at Cop26 in Glasgow next week. 

Diesel reached 146.50p a litre on Sunday, still 1.43p short of its April 2012 all-time high of 147.93p, the AA announced today. This graph shows price changes from 2008 to now

Diesel was at 146.50p a litre Sunday, 1.43p less than its April 2012 record of 147.93p. The AA announced today. This graph shows price changes between 2008 and now 

RAC data show the price of unleaded has rocketed by 28p a litre in a year from 114.5p in October 2020, adding £15 to the cost of filling up a family car. 

Today, Mr Sunak told MPs: ‘With fuel prices at the highest level in eight years, I’m not prepared to add to the squeeze on families and small businesses.

“So I can confirm today that the planned rise in fuel tax will be cancelled. That’s a saving over the next five years of nearly £8billion.’

Reacting to the news, Howard Cox, founder of the campaign FairFuelUK, told MailOnline: ‘FairFuelUK warmly welcomes freezing fuel duty for the 12th year.

A sign outside a BP petrol station in the Surrey village of Lower Kingswood is seen yesterday

Yesterday, a sign was found outside a BP station located in Lower Kingswood in Surrey.

FairFuelUK takes some credit for the longest period in which any UK excise levies were capped. This is great news for drivers who are struggling financially. 

However, he added that it was an ‘opportunity missed’ too, saying: ‘With pump prices at their highest ever, meaning the Treasury is wallowing in a £1billion unexpected windfall, it was a time for the Government to have cut fuel duty significantly.

“It was a time too to incentivise motorists to move to cleaner fuels. We put a moratorium to the unpopular 2030 ban for new diesel and petrol car sales until more cleaner fuel technologies are available.

“For these reasons, you must take these points into consideration: UK drivers are still one of the world’s highest taxed motorists. They have to deal with an uncontrolled pump pricing lottery and congestion charges, as well as a perpetual demonization of all environmental ills.

Prices at petrol pumps reached an all time high on Sunday when they were recorded at 142.94p a Liter. This was 0.46p higher than the record set in April 2012 by 0.46p. 

Experian Catalist calculates these data and sends them to the RAC/AA. 

Edmund King, president and CEO of AA, said that drivers will be relieved to hear that duty has not been increased, especially given record pump prices. This is a pragmatic approach from the Chancellor.

“This will provide some ‘pump relief, but the pain of record-setting petrol prices remains. Our research shows that lower income drivers reduce their household spending to keep their cars on-the-road when fuel prices rise. These drivers will benefit by freezing duty.

We will be looking for more infrastructure and fiscal incentives to support our COP26 position to ensure that the UK “gets electric done” as soon as possible. The new EVs will soon be available for purchase by fleets and company drivers.

‘The AA welcomes additional funding for lorry parks facilities as a partial step to attract more HGV driver and improve the efficiency of our road network. To reduce deaths, improve safety, and reduce vehicle damage, funds to fill one million potholes are welcomed by both two-wheelers and four-wheelers.

These latest figures represent a significant rise in price from the early days after the pandemic when petrol prices plummeted down to 106.48p per barrel in May 2020.

The AA stated that the recovery is much faster than the two and a half years that it took for prices after the 2008 financial crisis to recover. 

Simon Williams, RAC fuel spokesperson, said that the Chancellor confirmed that duty will remain frozen at 57.95p a litre. With record high pump prices, it would have been disastrous to change our minds and raise costs further at the forecourt. 

‘If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p taking the cost of a tank to over £80, and diesel an eye-watering 150p.

“But we are disappointed that he did not offer any relief for drivers at the pumps.” Since VAT is added to the final cost of motor fuels, drivers would have benefited from a temporary reduction in VAT. This is at a time when filling up a car is causing more harm than ever before to household budgets and the wider economy. People will have less money to buy.

Oil prices have risen from 50 dollars per barrel in January, to 85 dollars today, since the beginning of this year.

The price of a barrel oil reached 117 dollars in 2012, when the last record was broken.

However, today’s exchange rate between the pound (£) and the US dollar is lower, making it more costly for British companies to purchase coal.

The RAC reported that the price of ethanol, which is added to petrol in the UK, has risen by 80 percent since 2012.

The price rises also came the weekend before 300,000 people in London’s new Ultra Low Emission Zone face a charge of £12.50 every day because their cars are old and emit too much carbon.