As predicted in the forums a few days ago fuel prices are set to rise yet again, from the BBC this morning:
Fuel duty will rise by 1.28p a litre from 1 October, the Treasury has confirmed.
The increase, which will add five pence a gallon to petrol and diesel prices, is in line with inflation, it said.
But motoring organisation the AA called it an “appalling state of affairs” for drivers.
The price increase was announced in Chancellor Gordon Brown’s April budget but its implementation was postponed for six months because of uncertainty in the world oil market.
‘Not justified’
“The volatility of oil prices at the time of the Budget has now diminished and oil prices have become more stable,” the Treasury said in a statement justifying the increases.
But that was angrily rejected by the AA.
Spokeswoman Rebecca Rees said: “There is no justification for the rise in fuel duty given that the situation in the Middle East is still extremely volatile, and that volatility was confirmed yesterday when Opec decided to cut oil production.
“The gap between what UK drivers pay in motoring taxation compared to what they get back in road transport expenditure is now wider than it’s ever been.
“Currently, expenditure is only £1 for every £5 collected in tax.”
Including the VAT that would be imposed on top of the rise, the increase would mean drivers doing 10,000 miles a year would pay about £23 more a year for their petrol, the AA said.
Price rise fear
On Wednesday, Opec said it would cut production by 900,000 barrels a day from November.
The oil producers’ cartel said it had taken the measure to pre-empt a situation where it was over-supplying the market.
Its stated aim is to keep crude oil prices at about $25 a barrel but the announcement of a supply cut pushed prices well above that level, leading to fears of higher fuel prices.
Freeze
The Treasury said fuel duty had been “reduced by 13% in real terms” since 2001.
Labour was forced to abandon the controversial “fuel price escalator” it inherited from the Conservatives and faced widespread protests in 2000 about high fuel prices.
The “escalator” meant that prices increased above inflation every year.
The following year, the government cut duty on fuel in the Budget, and it had remained frozen until now, the Treasury said.
The Treasury said the freeze had cost the chancellor £1.8bn.