10.03.08 The Chancellor must scrap the 2p fuel duty rise
On Wednesday the Chancellor Alistair Darling will unveil the 2008 budget, and with it, a series of tax hikes on motoring. The government is still planning to press ahead with a 2p increase in fuel duty, to take effect from April 1st 2008, despite increasing fears over the state of the economy and new record oil prices being set each week. Oil prices reached a record $107.44 on Monday morning.
Figures from PetrolPrices.com show that the price of unleaded has shot up 18.1p per litre in the last year. At the beginning of March 2007 a litre of unleaded cost 88p. Both unleaded and diesel are at record highs - unleaded is now 106.1p per litre and diesel is 112.5p.
Despite the impact record prices are having on motorists, on the haulage industry and on inflation, it's likely believe that the Chancellor will push through the price rise anyway. Many believe he is scared of being labelled as a hypocrite – this year's budget has been billed as the 'Green Budget', and cutting fuel duty would not be in line with the overall message the government wants to convey.
Other methods of taxing motorists are expected to be announced too, for example taxing gas guzzling cars out of existence, by adding a 'showroom' tax of £2000 to the most heavily polluting cars, and colour coding tax disks by carbon emissions. This would make it easier for local councils to identify and penalise high polluters, possibly by charging 4x4 owners more for parking.
But why does the Chancellor need this extra revenue? Rising fuel prices caused by oil price rises have been bad for motorists, but good for the government. Compared to the Pre-Budget Report in October, figures suggest that the Treasury has received an extra £1.2 billion in revenue because of the tax on North Sea oil. This means Mr Darling could easily afford to scrap the 2p increase, which estimates suggest would cost £1 billion.
If the Chancellor doesn't scrap the increase, and the conditions in the economy and the oil market continue, pump prices will hit £1.50 a litre this year - the equivalent to well over £6 a gallon. This would have a catastrophic effect on motorists, the haulage industry, and therefore inflation and the country as a whole.
Motorists across the UK are now having to adjust their driving habits because of the price rises - many now take fewer non-essential trips, have switched to smaller or more efficient cars or drive slower to get the most out of their tank. Green lobbyists see these changes as evidence that hitting motorists financially is the only way to curb carbon emissions, but it's possible that going ahead with the 2p fuel duty rise and continuing to target motorists could cost Labour much more than a few pennies at the next election.
Should the 2p rise be scrapped? Have you changed your driving habits as a result of fuel prices? Are green taxes stealth tax or will they help us cut our carbon emissions?








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For me to get from where I live to work, I have to drive. Public transport is not an option. also, my hubby is disabled, so a car is essential for him too. I only earn £5.60 per hour. Yet another example of beating the workers down further!
Remember the largest british petrol companies recorded record profits last year!!
Between the government and the petrol companies greed, something has to be done to limit this extortion. Now food suppliers are using this an reason to put prices up. I do not understand why the petrol price can vary around the country; actually I do understand it is also due to greed. Take tesco for example they obviously look at other suppliers in the area and alter their prices to 'match' so they can make as much profit as possible, why not offer the motorist a real deal and keep petrol prices competitive across the counrty.
It is about time we all stop talking about it and we all stand together and do something about the price of fuel but we are british and always let the goverment walk all over use its time to stand up and be counted if we all stand together they would have to do something but that will never happen