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Fuel and alcohol duties frozen but tobacco prices will rise today

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The chancellor has announced fuel and alcohol duties will be frozen for the tenth year in a row but tobacco prices will increase from 6pm today.

Rishi Sunak confirmed fuel duty will be frozen, saving drivers a cumulative £1,200 compared to what they would have paid under the pre-2010 fuel duty escalator.

The duty remains at 57.95p per litre on both unleaded and diesel. However, Budget documents note: “Future fuel duty rates will be considered alongside measures that are needed to help meet the UK’s net zero commitment.”

RAC head of policy, Nicholas Lyes, said: “We welcome the Chancellor’s freeze in fuel duty which will be a relief to drivers up and down the country. While the Chancellor might have been tempted to increase duty, the reality is that for millions this would have simply increased their everyday driving costs and done nothing to encourage them to switch to cleaner vehicles.

“And while many want to seek alternative transport options to using their vehicles for some journeys, in so many parts of the country reasonable public transport provision simply does not exist.”

However, it’s not all good news for drivers as Vehicle Excise Duty (road tax) will be up-rated for cars, vans and motorbikes in line with RPI from 1 April 2020.

Meanwhile, a planned rise in beer duty has also been scrapped, with rates frozen on spirits, wine and cider.

Sunak said this will be only the second time in almost 20 years a government has frozen all of these duties.

However, given we’re in the post-EU transition period, the government said it will review potential reforms to be implemented as part of its ‘Post-EU exit alcohol review’.

Duty rates on tobacco products will increase by RPI + 2% until the end of the parliament. The rate on hand-rolling tobacco will increase by RPI + 6% this year.

The government confirmed the changes will take effect from 6pm today (11 March).

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