Rishi Sunak was accused by a senior Conservative MP on Friday of “plundering” from motorists with the Treasury’s VAT take on petrol after it soared to more than £100-a-tank.
The Chancellor came under fire amid claims that the Treasury is now making more in tax from petrol than before his 5p-a-litre cut in fuel duty in March.
After the cost of filling up hit a record high, former Cabinet minister Sir John Redwood tweeted: “Lots of support for an urgent cut in VAT on petrol and diesel.
“The Chancellor needs to limit the amount he plunders from us at the pumps. How much more inflation does he want? How big a squeeze on incomes?”
His intervention came after independent forecourt group chief Alasdair Locke claimed that in mid-February, before the Chancellor reduced fuel duty, the Government was getting about 83p a litre, which was a combination of VAT and duty, but earlier this week this figure had risen back up to 84p as the Chancellor rakes in more from VAT from the higher petrol and diesel prices.
Cabinet minister Michael Gove, though, warned petrol retailers against making “excess profits” and that an “eagle eye” would be kept on them to make sure that they are not ripping off motorists with sky-high prices.
Lots of support for an urgent cut in VAT on petrol and diesel. The Chancellor needs to limit the amount he plunders from us at the pumps. How much more inflation does he want? How big a squeeze on incomes?
— John Redwood (@johnredwood) June 10, 2022
But motoring organisation the AA called for Mr Sunak to make an immediate 10p cut in fuel duty, with senior Conservative MP Robert Halfon saying it should be between 10p and 20p “at least temporarily”.
Boris Johnson appeared to hint on Thursday that tax on petrol and diesel could be cut.
Asked about the spiralling cost of petrol and diesel, the Prime Minister said that the Government would “continue to look after people in any way that we can”.
However, he stressed he did not want to “anticipate” any tax decisions by the Chancellor.
As the cost of filling up rose to eye-watering levels, Mr Johnson said: “We are watching it.
“We hope that corporations will be responsible and will recognise that now is the time not just to take price but to look after consumers.
“That is in their long-term interests as well.
“I’m not going to anticipate what fiscal decisions the Chancellor may take but we will continue to look after people in any way that we can.”
The average cost of filling a typical family car with petrol soared on Thursday above £100 for the first time.
That was an increase of 1.6p compared with Tuesday, taking the average cost of filling a 55-litre family car to £100.27.
The average price of a litre of diesel on Wednesday was 188.1p, having recently gone over £100-a-tank.
Some forecourts are already selling petrol and diesel above £2 per litre.
