Darling hints at duty freeze

Published on Saturday 31 May 2008 19:59

ALISTAIR Darling, the Chancellor, has given the clearest signal yet that he is considering delaying plans to increase duty on petrol.

Darling has hinted that if international fuel prices remained high in the autumn, when the 2p increase was due, he would not apply the rise. He is under growing pressure over the cost of driving, with petrol now as much as 1.26 a litre and diesel at 1.40 in some parts of Scotland.

International oil prices have risen in recent months from $85 a barrel to a peak last week of $135 because of rising demand in Asia and production problems in Iraq and Nigeria.

World politicians have attempted to put pressure on oil-producing countries to boost output and last week the UK Government announced tax concessions to spur the development of two new North Sea fields.

Darling postponed a rise that had been due in April and he signalled that another postponement was a real possibility. He said: "I'm very conscious of the fact that people and businesses are facing an increasing burden every time they fill up their tank. One of the reasons I postponed the fuel duty increase due in April was that I was very concerned about that.

"There is an increase due in October. I will look at that closer to the time and if I judge it right I am prepared to postpone that increase again."

Campaigners point out that although the international oil price has soared in recent months, UK fuel taxes make up about 70% of the price motorists pay at the pump.