Press release

23 Mar 2022 London, GB

EY - Spring Statement: Fuel duty reduction highlights energy trilemma

The reduction in fuel duty announced in the Chancellor’s Spring Statement highlights that, in the short to medium term, the government will have to wrestle with the re-emergence of the energy trilemma: simply put, how does the government address the competing demands of energy affordability, energy security and sustainability?

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Derek Leith, EY’s Global Head of Tax for Oil and Gas said:

“The reduction in fuel duty announced in the Chancellor’s Spring Statement highlights that, in the short to medium term, the government will have to wrestle with the re-emergence of the energy trilemma: simply put, how does the government address the competing demands of energy affordability, energy security and sustainability?

“Whilst the current pump price is providing more than enough to deter any unnecessary mileage, more is needed to promote the adoption of new technologies and trigger a change in consumer behaviour. More investment in renewable generation and solutions to supply chain challenges are needed.

“Where that leaves us is with some uncomfortable truths. Whilst we must continue to focus our efforts on reducing demand for fossil fuels in our economy, and take bolder steps in that direction, it will be extremely difficult to pass the costs of the necessary investment onto the consumer.”

For all our Spring Statement analysis visit our dedicated web page.