How much money will I save from the cut in fuel duty?

Chancellor Rishi Sunak has announced a cut in fuel duty of 5p per litre in his spring statement.

Here, the PA news agency answers 10 key questions about taxes on fuel.

– What has been announced?

Fuel duty will be cut by 5p per litre for petrol and diesel.

– When will the change by implemented?

From 6pm on Wednesday.

– Will pump prices be automatically lowered?

The RAC warned drivers they will only notice a difference once retailers have bought new fuel at the lower rate.

– Will retailers definitely pass on the whole duty cut once they have restocked?

They are under huge pressure to, but there are fears some could boost profit margins instead.

– How much will I save if the cut is passed on in full?

The RAC calculated that would reduce the cost of filling a typical 55-litre family petrol car by around £3.

– When was the last time the rate of duty changed?

It has been frozen at 57.95p per litre of petrol and diesel since March 2011.

– How long will the reduction in duty last?

Until March next year.

– What about VAT?

VAT is added on top, at a rate of 20% of the combined product price and duty.

– What are the latest average pump prices?

The average cost of a litre of petrol at UK forecourts on Tuesday was 167.3p while diesel was 179.7p, figures from data firm Experian Catalist show.

This is an increase of 18p per litre for petrol and 27p for diesel over the past month.

– Why have prices reached record highs?

Oil prices surged immediately after Russia’s invasion of Ukraine due to supply fears, leading to a rise in wholesale costs.

Prices were already increasing as global economies recover from the coronavirus pandemic.