Page last updated at 23:00 GMT, Monday, 31 August 2009 00:00 UK

Fuel duty rise comes into effect

Jo Tanner, Freight Transport Association: "It could be the end of the road"

A two pence rise in fuel duty has come into effect, the third such increase in nine months.

Stephen Glaister, director of road users' pressure group RAC Foundation, told the BBC the government's latest rise "will hit everybody hard".

When VAT is included, the increase will actually total 2.3p. The average price of petrol across the UK is about 105p per litre.

The government says the extra duty is needed to help fund public investment.

'Huge effect'

AA president Edmund King said the timing of the rise was "pretty dire", at a time when the UK economy was trying to exit recession.

Motorist topping up his fuel tank
If the money was going into public transport, drivers would be better off as there would be less cars on the road, less congestion for them
Richard George, Campaign for Better Transport

Mr King said its members were already having to cut back on car journeys due to the high price of fuel, and that this would only increase following the latest rise, meaning the government's revenues will not actually rise.

The Petrol Retailers Association pointed out that the price of fuel would increase again when VAT increases from 15% to 17.5% at the end of the year.

"It would have been preferable for the government to defer this increase until 2010," its spokesman said.

Jo Tanner, director of communications at the Freight Transport Association (FTA), said existing high fuel prices were already having a "huge effect" on its members.

She said the freight transport sector had already seen its fuel bills rise by £800m since last December, at the same time as a 50% increase in insolvencies.

Richard George, a road and climate campaigner at the Campaign for Better Transport, said the government should be spending the duty increase on public transport, and not just putting it into the government's general budget.

"If the money was going into public transport, drivers would be better off as there would be less cars on the road, less congestion for them," he said.

Supermarket group Morrisons said it would not be increasing the cost of fuel at its forecourts until 6 September.

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