Cost of living: Fuel duty cut wiped out as diesel price hits new record high | Business News

Diesel prices have hit a new record high wiping out the chancellor’s cut in fuel duty, latest figures show.

The average cost of a litre of the fuel at the pump reached 178.4p on Monday, according to government data.

The previous high of 177.5p was set two days before Rishi Sunak introduced a 5p per litre cut in fuel duty on 23 March.

It means that filling up a typical 55-litre family diesel car is around £26 more expensive than a year ago.

Petrol prices have also nearly returned to the level seen before the duty cut.

The average cost of the fuel was 163.7p per litre on Monday, compared with 165.4p on 21 March.

It comes amid growing pressure on the government to do more about the cost of living crisis.

Labour is calling for a windfall tax on the soaring profits of oil and gas giants as customers’ bills rise – a move which has not been ruled out by Mr Sunak and Boris Johnson.

Steve Gooding, director of the RAC Foundation, said: “As we feared, it didn’t take long for the 5p reprieve to be swallowed up by global events which are driving pump prices back towards record levels.

“The chancellor can’t be blamed for the soaring cost of oil but he could and should go further in cutting the rate of duty.

“Whilst all the attention is on the price of a barrel of Brent crude, the chancellor continues to quietly take in taxation only just less than 50% of everything that drivers pay on the forecourt.

“There has been a lot of criticism of the windfall profits being made by companies like BP and Shell, but let’s not forget that record oil prices are also bringing in extra for the Treasury in the form of VAT which is levied not just on the product price of petrol and diesel, but also the duty element.”

Labour’s shadow secretary of state for transport Louise Haigh said: “Working people are facing a cost of living crisis, and the Conservatives have literally nothing to offer.

“Labour’s plan would help households through this crisis with up to £600 cut off energy bills, funded by one-off windfall tax on the oil and gas giants taking working people for a ride at the petrol pump.

“The Conservative government needs to set out an emergency budget to tackle its cost of living crisis – and support Labour’s call to put money back in the pockets of working people.”

Bernard Looney, chief executive of BP, has said his company’s investment plans would not be affected by any windfall tax.

He told the company’s AGM on Thursday: “Our £18bn plans are not somehow contingent on whether or not there is a windfall tax.”

But he added: “By definition, windfall taxes are unpredictable – and so would challenge investment in home-grown energy… we would love to invest even more – and one of the key foundations of any such decisions will be a stable fiscal environment.”