"The real independent and not for profit voice in Westminster for 37m UK drivers, who want clean air too, but want this accomplished without being demonised, blamed and continually treated as easy cash cows."

UK Drivers are STILL the highest taxed motorists in the world

1. Had the freeze not occurred, the fuel duty escalator’s impact on CPI would have reached 6.7%. It is now 1.6%! 

2. Had the fuel duty escalator continued as planned from 2011 onwards, fuel duty today would be 83.33p per litre rather than 57.95p per litre, 43.8% higher. 

3. The CEBR estimates that this would translate in overall fuel prices being 24.0% higher, circa £1.65 to £1.70 per litre. Combining this with their statistical analysis between fuel prices and various general price indices, they find that this would translate into the following: 

     *  6.66% higher consumer prices
     *  5.22% higher output producer prices
     *  20.33% higher input producer prices
     *  5.14% higher prices for road freight


4. The yearly impact of higher inflation across all of this, would have eventually reached £14.5 billion per year, in funding all UK’s outstanding government debt. That’s over £116bn in cumulative debt funding costs over 8 years.

5. The CEBR estimate that household expenditure is £24.2 billion higher per year due to fuel duty being frozen. This equates to approximately 1.21% of total GDP.

The True Price of the Fuel Duty Freeze

So, what is the real cost of the freeze in fuel duty since 2011? 

Had the fuel duty escalator continued as planned from 2011 onwards, this levy today would be 83.33 pence per litre rather than 57.95 pence per litre, 43.8% higher. And please don’t forget the repugnant VAT on the duty itself. That would have meant current pump prices being around £1.70 plus. 
What would that cost of filling up done to our economy, our vital small industrious businesses and more importantly, those real people who are ‘just about managing’? Words such as recession, struggling, debt and bankruptcies would be words littering the media’s airwaves and newspapers alongside Brexit.

So, FairFuelUK with its founding backer, the Road Haulage Association, commissioned the much respected and Government used independent economists CEBR, to delve into the legitimacy of Hammond’s declarations.

The CEBR’s task was simple, to examine the claims championed by out of touch Ministers, that the economy and those led by Number 11’s current occupant, they have been fiscally pickpocketed by not increasing fuel duty since 2011. 

 Based on CEBR’s dynamic modelling and recognised by the Treasury, the self-wounded Chancellor’s alleges could not be further from the truth.

Had the freeze not occurred, the fuel duty escalator’s impact on CPI would have reached 6.7%, creating major inflationary pressures in the UK.  It is now 1.6%! 

 Due to fuel being such an important input to manufacturing, the magnitude of these costs if there had been no hold on fuel duty, would have been 20.3% in 2018, compared to the actual yearly rate of 8.7%. So, by not having a freeze in fuel duty, the ensuing sky-high business costs could have led to a significant increase in the production overheads for manufacturing firms, potentially harming their underlying profitability and competitiveness.

Factory gate prices would have been impacted too. Total output prices in the economy due to fuel prices would have been 5.2% greater had the escalator been in place. 

 A very similar effect is found in the service price indices of road freight, generating an impact of 5.14% due to the fuel duty escalator not being frozen. This was attributed to the use of fuel for the service of transport itself. These firms would have had no option but to increase their prices to their customers, who in turn would pass their costs onto consumers.

This perceived loss in revenue to ‘Spreadsheet Phil’ the last Chancellor appears like a large sacrifice, but in fact, it is offset by other critical influences, he totally discounts. More specifically, had the fuel duty escalator driven up UK inflation, that would eventually come to impact on the UK funding costs on the £1.8 trillion of gross UK government debt.

The yearly impact of higher inflation across all of this would have eventually reached £14.5 billion per year, in funding all UK’s outstanding government debt.