Friday, 28 January 2011


Everybody is getting hit hard by the high fuel prices, if the Prime Minister breaks his promises on introducing a fuel duty stabiliser then the poorest in society suffering more than the rest of us. The Conservative Party promised to look into a "fair fuel stabiliser" in their election manifesto, in early January, David Cameron said he was considering ways to help cash-strapped motorists. More recently Cameron has played down the possibility of a "fair fuel stabiliser" to limit fuel duty rises. The fact that UK Government benefits to the tune of 600 million a week in fuel duty may be a contributory factor in relation to the PM’s indecision, just as it was with former New Labour PM, Gordon Brown, perhaps Mr Cameron should declare an interest?

There is an urgent need to see measures put in place to stabilise prices before they rocket even higher. Implementing a Fuel Duty Regulator would at least bring duty down when oil prices go up – and cap prices at the petrol pump. I think that there is little chance that Cameron will keep to his word or his election pledge on introducing a fuel duty stabiliser, as this UK Coalition Government seems to have shed any real principles as regularly as the snow melts in warmer weather.

The Federation of Small Businesses (FSB) says the UK now has the second highest diesel price in Europe - something which it says is causing great difficulties for hauliers and other businesses dependent on road transport. They point out that in Europe, the total price is split about 50/50 between the cost of the fuel itself and tax, yet, in the UK, the average product price is 38% of the total, with the remaining 62% coming from tax. Fuel duty already costs 58.95p for every litre. Average prices at the pump are now around 127p per litre and the Retail Motor Industry Federation has written to the Chancellor asking him to scrap the planned fuel duty increase, due in April.

Prices reached $147 a barrel before the recession in 2008 but are currently about $100 a barrel. The average price of petrol is rising at the highest rate for 10 years. The average cost of a litre of unleaded petrol has gone up by 6.13p since mid-December to a record 128.27p (£5.83 a gallon). The price of diesel is even higher and in some rural areas the cost of fuel is more than 20p a litre above the average figure. There are further increases in duty planned for April as well as expected rises in the price of oil. The 4th January VAT hike to 20% and a simultaneous rise in fuel duty, did little to help matters, as motorists saw 3.5p added to the cost of a litre.

Plaid Cymru has long favoured a new system of regulating tax on fuel in order to mitigate the effects of high prices at the pumps, and for a fuel duty regulator to cap the price of petrol at the pump when it rises too quickly. Wholesale oil prices will inevitably rise over the next few years as the world economy re-builds itself in the face of an increasing demand for oil and all of us will pay for higher fuel prices directly or indirectly. What's needed is an increase in sustained investment in renewable energy sources which would boost our economy without damaging the planet. It is scandalous that Wales was left out of recent pilot programmes for electric cars, but recent experience tells that for many Westminster Governments (Conservative or New Labour) Wales is so often out of sight and out of mind.

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