Fuel duty cuts not enough to compensate for rising car insurance premiums

Fri, 25 Mar 2011

The reduction in fuel duty announced in the is week's Budget is not enough to make a difference to drivers' finances, which are being drained by high car insurance premiums, it has been claimed.

Chancellor George Osborne said in Wednesday's (March 23rd) Budget speech that there will be a 1p per litre reduction to fuel duty.

However, a survey by moneysupermarket.com found that 86 per cent of motorists do not believe this will make a serious difference to their costs.

Kevin Mountford finance expert at moneysupermarket.com said the concession was vastly outweighed by spiralling fuel prices and car insurance premiums .

"Motorists are all also being hit hard in the wallet by the rising cost of car insurance. Our recent research showed car insurance prices increased by 31 per cent from January 2010 to January this year - or 44p per day, and unfortunately there still aren't signs of increases slowing down," he said.

It follows similar comments from the Adam Smith Institute, which said the reduction in fuel duty will have little impact on businesses or ordinary people.
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