Plea to slash duty as fuel costs soar to record high

Osborne: urged to slash fuel duty. Picture: Reuters
Osborne: urged to slash fuel duty. Picture: Reuters
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PRESSURE is growing on Chancellor George Osborne to curb fuel duty after petrol and diesel prices hit new records.

The SNP accused Mr Osborne of “highway robbery” yesterday following the new high of 137.44p a litre for unleaded petrol and 144.67p for diesel.

The UK average petrol price is now 0.01p above its previous peak of last May. Diesel has already capped its previous May record of 143.04p by rising to 143.05p two weeks ago.

That means fuel is now 7p to 9p a litre more than a year ago, and 24p-31p more than in 2010 – or an extra £12 a tankful.

The new records came a day after the introduction of the UK government’s 5p fuel duty rebate scheme for the Western and Northern isles was overshadowed by claims it had been wiped out by the price increases, thought to have been triggered by oil prices being driven up by tensions in the Middle East and signs of an improving United States economy.

According to the comparison website petrolprices.com, the cheapest petrol in Edinburgh on Thursday was 131.9p. It was 1p more in Glasgow, 3p more in Inverness and 8p more in Stornoway. Motorists in the Western Isles were paying up to 149.9p. Diesel was 7p to 9p more expensive than petrol in each area.

The Automobile Association, which published the latest fuel prices, said that action was essential. Its president, Edmund King, said: “This new record just confirms what every family and business knows – fuel prices are hurting them badly, and there seems no stopping them.

“The AA has asked the Chancellor to do what he can to protect the UK economy from fuel market volatility and record high prices which are stemming growth. There is no more give in family and business budgets.”

Angus MacNeil, the SNP transport spokesman in Westminster, called for a fuel duty regulator. He said: “It’s a national scandal that, in an oil-rich country like Scotland, we are paying the highest fuel prices in Europe.

“With the bulk of the pump price made up of tax, the Treasury must stop this highway robbery because soaring fuel prices are hindering economic recovery – we need a permanent stabilisation measure to bring prices under control.”

Campaign group FairFuelUK, which is holding a mass lobby of MPs next Wednesday, called for a cut in fuel duty rather than the planned 3p increase in August.

Founder Peter Carroll said: “Our research proves a 2.5p cut would be at no loss to the Treasury because it would create 180,000 jobs that would bring in new tax revenue.”

Neil Greig, the Scotland-based policy and research director of the Institute of Advanced Motorists, said: “At the very least, the Chancellor must postpone the planned duty increases this year. Scottish drivers are suffering as they spend more and more on filling their cars, leaving less to help the economy.”

Philip Gomm, of the RAC Foundation, said: “It is the poorest households with a car which will be hit hardest.

“Their spending on running a vehicle is proportionally higher and they tend to own older, less fuel-efficient models.”

Friends of the Earth Scotland chief executive Stan Blackley said: “Motorists are paying the price for the failure of successive governments to reduce our cars’ dependency on increasingly expensive overseas oil.”

A Treasury spokesman said it had cut fuel duty by 1p last year, frozen it until this August and scrapped a second increase.