UK NEWS

FUEL PROTEST THREATENED AS BROWN GRABS £117M

ANGER: Fuel protests may return

Tuesday April 22,2008

By Louise Barnett

THE Treasury is enjoying a £117million monthly VAT windfall off the backs of motorists forced to pay more for their petrol, figures out today show.

Britain’s drivers are the most heavily taxed in Europe, paying 65.2p in tax and duty for every £1 spent at the petrol pump – at least 23p more than any other European nation.

Campaign groups said the petrol price hikes are creating a growing sense of crisis among road hauliers and motorists.

The rises could spark protests this summer, one group warned yesterday.

Motoring organisations are calling on the Government to ditch its 2p per litre fuel duty increase due to take effect from October 1.

The average price of unleaded petrol is now 108.56p per litre – up 15.31p on last year, according to the AA. Diesel has surged even higher, with average prices up 22.75p per litre to 118.23p.

The increases mean £117 million extra a month in VAT for the Treasury, according to accountants Grant Thornton.

David Handley, chairman of Farmers for Action and former co-chairman of the People’s Fuel Lobby, said: “We are being pushed so far that I would not be surprised before this summer ends to see protests.”

Oil prices reached a new high above 117 US dollars a barrel yesterday – 20 per cent higher than in January.

Jack Semple, director of policy at the Road Haulage Association, said truckers were struggling to cover soaring diesel costs. “Our message to the Government is we need stability at the moment.” The Association and the RAC Foundation are calling on the Government to cut fuel duty.

Grant Thornton said the Treasury was being paid millions of pounds extra by North Sea oil companies as prices rose and this could be used to cover the shortfall if the 2p a litre duty hike in October was deferred.

But a Treasury spokesman said the rise had already been deferred from this month.

“After these changes, by 2010 main fuel duty rates will still be 11 per cent lower in real terms than they were in 1999,” he said.

“The changes were made alongside reforms to vehicle excise duty that cut rates for less-polluting vehicles, and a number of measures to support hauliers, which they have welcomed.”