The Telegraph reports that new demands for the introduction of a fuel price stabiliser have been made following a record rise in petrol prices.
The paper reveals that motorists now pay an average of 122.14 a litre for petrol, 3.06 pence more than a month ago and that diesel has hit 126.19 pence – a rise of 3.12 pence.
The effect of this is that drivers today are paying on average £7 more for a tank of petrol than they were last December.
To make matters worse, two further tax rises will come into effect in January. On the 1st January there will be an increase of a penny increase in the cost of petrol when fuel duty goes up, then three days later a 2.5 per cent increase in VAT will add a further 2.5 pence a litre. These two rises will themselves add a further £1.25 to the cost of filling a 50 litre fuel tank.
The main increase has come about as the result of sharply rising oil prices, which have already broken $90 a barrel and are likely to rise to $100 a barrel as demand continues to increase.
The paper reports that during the election, the Conservatives pledged they would introduce a fuel stabiliser scheme to protect motorists by reducing tax if oil prices rose sharply. However as yet no decision has been made on when or whether a stabiliser will be introduced.
The Telegraph goes on to report that the Government’s silence was condemned by Edmund King, the AA’s president, who said:
“UK consumer spending is already losing £8 million a day from petrol prices that are 13.5p a litre higher than this time last year.
“A fuel price stabiliser, promised in the Conservative election manifesto, has been conveniently forgotten but would significantly reduce the impact of soaring fuel prices on consumers, business, inflation and economic recovery,”
Professor Stephen Glaister, director of the RAC Foundation, also demanded action.
“People will wonder what the government is doing. Nine months after motorists were promised a stabilizer the pain at the pumps goes on and is set to worsen,” he said.
“With the huge fluctuations in the price of a barrel of oil seen over recent years, and a 1p change in fuel duty meaning £500 million more or less income for the Treasury, ministers are clearly reluctant to introduce a formula which could see the public finances hit. Which means the UK’s 34 million drivers continue to suffer instead.”