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The Budget 2016: How it affects motoristsBack

NFDABudgetThe Chancellor announced his Budget today. Below, Trusted Dealers outlines what the latest 2016 Budget means for motorists.

Despite many experts predicting an increase, the Chancellor announced today that fuel duty would be frozen for the sixth year in a row, saving the average driver £75 per year and £270 for small business owners with a van.

The current prices for diesel, biodiesel and bioethanol are charged at a rate of 57.95 pence per litre, and forecourts have slashed their prices in recent months to around £1 per litre, a vast decrease from the £1.40 motorists were shelling out a few years ago.

Due to the fall in prices at the pumps, many motoring experts had speculated that adding a small rise to fuel duty over the rate of inflation would raise billions for the Treasury, but in a surprise announcement, Osbourne confirmed that the current freeze in fuel duty would remain.

“We froze fuel duty throughout the last Parliament – a tax cut worth nearly £7 billion a year. In the last twelve months, petrol prices have plummeted. That is why we pencilled in an inflation rise. But I know that fuel costs still make up a significant part of household budgets and weigh heavily on small firms. Families paid the cost when oil prices rocketed; they shouldn’t be penalised when oil prices fall,” Mr Osborne said.

Further budget announcements to affect motorists included the slashing of tolls for the Severn crossing between England and Wales to half, bringing the cost down for £3.30 per car. Plans to build a tunnel road between Manchester and Sheffield have also been approved which will make the M62 into four lanes, whilst the A66 and A69 will be upgraded as part of the ‘Northern Powerhouse’.

Commenting on the Budget, Steve Gooding, director of the RAC Foundation, said: “Transport is the biggest area of household expenditure bar none, but 38 million drivers will be relieved it didn’t just get bigger still. And the Chancellor will hardly be out of pocket. As it stands, tax on petrol and diesel still accounts for about 75 per cent of the pump price and Mr Osborne remains on course to collect more than £27 billion in fuel duty alone next year.”

It was also revealed that driverless cars will be tested on Britain’s motorways – plans will be revealed when the budget is posted online later today. Trials of fully autonomous vehicles on UK roads will begin in 2017 to help the country to “lead the world in new technologies and infrastructure”. The trials will be funded by the government’s £100m Intelligent Mobility Fund.

Nissan and Tesla are already working on autonomous technology, and it has recently been announced that autonomous lorries will be tested on UK roads this year.


Petroleum revenue tax for oil producers was also “effectively abolished” and there will be a 50 per cent tax reduction on oil for producers, bringing the figure down to 10 per cent, which could impact on the price of fuel at petrol pumps.

Posted by Leana Kell on 16/03/2016