Fuel: a system that strives for fairness

The fair fuel stabiliser is a means of varying the tax which the government charges on the petrol at the pumps to ensure that motorists are spared the worst of spiralling oil prices.

Essentially, as the price goes up, the tax comes down, and if the price goes down, the tax goes back up.

It would work by ministers taking the increase in income from petroleum revenue tax on North Sea production - which increases as the price of oil rises - and using this windfall to reduce duty and cut the price of petrol at the pump. The money currently goes to the Treasury.

Problems arise in the relationship between international oil prices and petroleum revenue duty which have inherent time lags - making it a complex measure to implement. But Treasury officials have been working on this since the coalition government came to power in an effort to find a workable solution.

Ministers say the measure would be aimed at cutting out the "peaks and troughs" to ensure that prices do not rocket one week, then fall dramatically the next. The SNP has backed a similar measure called a "fuel duty regulator".