FairFuelUK commissioned (with the Road Haulage Association) the Independent Economic Think Tank, CEBR to ascertain what the Fuel Duty Freeze since the beginning of 2011 has done for the economy. Their summary is shown here:

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 £1.70 to £1.80 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 CEBR Report can be read and downloaded at https://www.fairfueluk.com/BUDGET2018/fuelduty.html

Leave a Reply

Your email address will not be published. Required fields are marked *