Chancellor 'playing roulette' with fuel prices

Motorists have earned a reprieve from planned hikes in vehicle excise duty (VED) - but have not been spared increases in fuel duty.

Announced in the pre-Budget report, the inflation-busting increases in VED - previously promised to be up to £90 for the biggest polluting cars - are now set to come in during 2010.

Chancellor of the Exchequer Alistair Darling told MPs that all VED rates are set to rise by up to £5 in 2009, but that the most polluting vehicles would now only face a £30 rise, deferred until 2010.

Meanwhile, those buying the least polluting cars could benefit from a similar-sized reduction in their road tax.

Despite the VED announcement, Mr Darling confirmed a 2p-per-litre increase in fuel duty from 1 December, rising again by 1.84p from April next year.

At today's prices, the AA estimates that increases in fuel duty will offset any savings in VAT.

Despite welcoming the VED plans, AA president Edmund King described them as a "short-term tonic".

"The Chancellor is giving with one hand and taking away with the other," he added.

"Increasing fuel duty whilst reducing VAT shows that the Chancellor is playing roulette with global fuel prices and could lose his gamble."

IMAGEBen Birchall/PA Wire