14p a litre off petrol: It can be done

The Daily Express has come up with a mechanism that would cut fuel duty as the price of crude oil rises. [>

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Our system, the opposite of the controversial fuel price escalator which is set to put another 2p on a litre in October, would be funded by the Government’s £6billion windfall from higher taxes on North Sea oil. [>

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The innovative scheme was backed by industry experts last night. Sheila Rainger, deputy director of the RAC Foundation, said: “The proposals sound spot on.” And the AA’s Paul Watters said: “A price stabiliser like this would be something well worth looking at.” [>

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The Daily Express will this week take our crusade against the 2p increase to Downing Street, delivering 85,000 signatures to show Gordon Brown the extent of the nation’s fury at his lack of action on the issue. [>

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Our scheme to protect motorists from the volatility of the wholesale oil market has been verified by accountants Grant Thornton. It would cut fuel duty from its current flat rate of 50.35p a litre depending on the amount by which crude oil prices exceed the 84 dollars price used in the March Budget calculations. [>

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Changes would be calculated every two months. If the average price of crude was 126 dollars a barrel – a conservative estimate – that would mean prices at the pumps going down by 14p. If wholesale crude costs fell, fuel duty would go back up. [>

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The savings would mean the average motorist paying £7 less for a tank of fuel. [>

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Grant Thornton’s senior tax manager Maurice Fitzpatrick, who has reviewed the scheme in detail, said: “The Daily Express proposal appears robust and realistic.” [>

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With crude oil now trading at over 142 dollars a barrel, the plan was welcomed by the Countryside Alliance. [>

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Spokesman Tim Bonner said: “It would give businesses in the countryside and elsewhere an opportunity to properly plan future expenditure and also give rural people a degree of certainty about the cost of living and working in remote areas.” [>

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TaxPayers’ Alliance chief executive Matthew Elliott said: “We would welcome a mechanism like this that recognised that record oil prices combined with high taxes are causing misery for millions of families. [>

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“It is not fair and it is not right for the taxman to cash in even more when people have to bear the bigger burden from price rises.” [>

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The RAC’s Ms Rainger added: “The Government is making a windfall from the high fuel prices and if that can be used to ease the burden on the motorist, that is an excellent use for that income. As a concept we are very supportive of it because the motorist is struggling quite desperately and we need to have some imaginative thinking about fuel duty.” [>

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Crude oil is now nearly 50 per cent more expensive than it was at the start of the year. Experts fear it could even hit 170 dollars a barrel. [>

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Motorists are paying 22 per cent more for unleaded and 36 per cent for diesel than a year ago. [>

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A survey last night for ITV’s Tonight programme claimed the rise in fuel prices had forced one in five people to cut back on the amount of food they buy. Diesel last week broke through the average £6 a gallon barrier. [>

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But a Treasury spokesman claimed fuel duty had fallen by 16 per cent in real terms since 1999. [>

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“The Government is very conscious of the pressures on families and businesses resulting from increases in worldwide oil prices,” he said. [>

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“There is no tax windfall from higher fuel prices. Any additional revenue is offset by a reduction in spending across other areas of the economy.” [>