Rishi Sunak is expected to cut fuel duty in the Spring Statement today.
Fuel prices have been soaring to record levels and the Chancellor has dropped a hint that fuel duty will be cut, helping motorists across the country.
The 'mini-budget' has been eagerly awaited as the UK plunges further into a cost of living crisis with rising bills, inflation expected to exceed 8% and petrol prices rocketing.
Money Saving Expert Martin Lewis has warned that he is "virtually out of tools" to help struggling Brits in the crisis, which has no clear end in sight.
MPs have remained far quieter than when the autumn budget was announced, with House of Commons Speaker Lindsay Hoyle warning against much of the statement from being leaked in advance.
Will fuel duty be cut during the Spring Statement?
It appears possible that there will be a 5p cut in fuel duty when the Spring Statement is announced by Rishi Sunak today.
The current rate is 58p and there could be a cut of 5p or 10p to try and save motorists some extra cash.
It is understood that the Chancellor has been reluctant to cut the duty as it will cost the Treasury billions to do so, while only gaining a minimal advantage at the pumps for British motorists.
However, when asked on Sky News about a potential cut, Sunak said: "I have a rural constituency, people are incredibly reliant on their cars and this is one of the biggest bills that people face."
The Resolution Foundation, a think-tank that aims to improve living standards for low-income families, said it is 'inevitable' that fuel duty will be cut.
Director Torsten Bell told BBC Radio 4’s Today Programme: "I think a fuel duty cut is now almost inevitable. We’ve seen prices at the pump go up by 40p over the last year."
Shadow Chancellor Rachel Reeves warned: “Even a 5p reduction in fuel duty will only reduce filling up the car with petrol by £2, so I don't think that really rises to the scale of the challenge we face at the moment."
Why is fuel so expensive?
Fuel prices were already suffering due to high global demand, but the war in Ukraine and sanctions of the imports of Russian-sourced oil means that there is yet more demand, pushing the prices even higher.
Amid other sanctions, the UK has committed to phasing out reliance on Russian oil by the end of the year.
Currently, Russian imports only account for 8% of total UK oil demand, but it is a different story on mainland Europe.
Germany, for example, gets an estimated 34% of its oil from Russia, which means that it would be very difficult to cut completely.
As a high demand for oil affects most of the world, oil can effectively be sold to the highest bidder, driving up costs as countries compete with each other.
