Business leaders have told the Chancellor the cost of fuel is stopping them from getting the economy back onto its feet after he turned down the chance to avert a rise in duty.
Drivers had their hopes of avoiding another petrol pump increase later this year dashed by Mr Osborne as he said the 3p per litre rise planned for April would go ahead.
Ian Stuart, group managing director of Birmingham-based tyre services firm ATS Euromaster, said: “The country cannot get back on its feet if the cost of fuel is continually dragging businesses and motorists back down.
“Any glimmer of hope that the Chancellor of the Exchequer, George Osborne, would offer British businesses and motorists relief from the soaring cost of petrol and diesel – which earlier this month hit record UK highs – was quashed during today’s Budget.
“The Chancellor confirmed he would not be making any further changes to the fuel duty plans already set out. As a result, the planned 3.02p per litre rise in fuel duty will take effect from 1 August 2012. With VAT at 20 per cent, this will see pump prices jump by nearly 4p.”
ATS Euromaster – a fleet operator with 1,223 vehicles – is urging vehicle owners and fleets to check tyre pressures at least once a month, and ideally before any long journey.
Mr Osborne revealed that vehicle excise duty (VED) would rise by the rate of inflation, although it would be frozen for hauliers.
Road users are already forking out for record petrol and diesel prices and today’s announcement from Mr Osborne was greeted with dismay by motoring groups.
AA president Edmund King said: “At a time of record prices at the pumps the August increase in duty is a budget blow-out which will force drivers off the road and could bring a summer of discontent for many.
“We have heard much about tax allowances but the increase in fuel duty makes no allowance for car-dependent, rural and disabled drivers.
“Only last week the Prime Minister told American students that UK fuel prices would make them ‘faint’, yet the Government seems intent on inflicting more pain for no gain on drivers.
“Ironically such a hike in duty doesn’t necessarily help Government finances as people will cut spending at the pumps and in shops, and it could fuel inflation.”
Professor Stephen Glaister, director of the RAC Foundation, said: “The Chancellor’s decision to go ahead with the summer rise in fuel duty is as unsurprising as it will be disappointing to 34 million drivers, especially when the Chancellor acknowledges there is likely to be a further spike in oil prices.
“George Osborne said that taxes should be fair, simple, predictable and support work. Motoring tax fails on at least three of these measures and it is time for a review of exactly what fuel duty is for and who it impacts most.”
Petrol now averages 139.67p a litre, with diesel at 146.39p a litre.
The August rise, including VAT, will put another 3.62p a litre on prices at the pumps, meaning that a typical 50-litre petrol refill will cost £1.81 more.
Road Haulage Association chief executive Geoff Dunning said: “The Chancellor’s decision to go ahead with this rise is not only disappointing, the reason behind it is hard to understand.”