Wednesday, February 9, 2011

George Osborne had asked not to hike fuel tax as petrol prices increase

fuel dutyYesterday, George Osborne faced growing calls to reject the planned fuel duty hike as prices hit a record high.

With petrol selling at average of 128.71p per liter and diesel 133.65p, the Chancellor stated there would possibly be announcements in next month’s Budget prior to the planned April 1 increase. A stabilizer mechanism might be included in the move to cope with oil price spikes.

During the question time of Commons, Mr Osborne stated that he fully understands the amount of pressure that motorists are facing.

But Edmund King, the AA president stated that the Chancellor needs to do more than hint at a freeze on the planned April fuel duty rise.

The increase would be more than one penny per liter as it would be linked to inflation, so would be at least three and a half pence.

The industry had appealed to cut petrol duty that would cost the government six billion pounds and lead to a financial black hole in public finances that would have to be filled by increasing other taxes, or by more painful public spending reductions, a green thinktank warned on Tuesday.

With the existing plans, taxes on petrol should go up slightly in this coming April, for helping the government to meet its greenhouse gas targets and encourage energy efficiency.

But the government is facing immense pressure from industry lobbyists to give up the planned hike, and in its place use taxes to help stabilize the price of fuel. That would call for reducing the tax when oil prices are increasing, to smooth out spikes.

Petrol prices have reached record highs after a sharp increase in the crude oil price. Fuel duty is now at about fifty nine pence per liter and motorists have also been affected by the rise in VAT rates.
Read More

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...