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Fuel duty rise suspended

16 July 2008
Categories: News
Panic move will cost Treasury £550m: Cable

The Government has postponed its controversial rise in fuel duty, which was expected to take place on 1 October.

The Chancellor had been under pressure to scrap the increase of two pence per litre — originally scheduled for 1 April — in light of the escalating cost of oil.

Main road fuel duty rates will now remain at 50.35 pence per litre, and planned rises in road fuel gases, biofuel duty rates and rebated oils rates will also be suspended.

Alistair Darling claimed his decision 'will help motorists and businesses get through what is a difficult time for everyone'.

He added: 'This measure is taken in response to sharp rises in world commodity prices, with the price of oil almost doubling over the past year to reach a real-terms record high of $146 a barrel recently.

'This has inevitably had significant knock-on effects on the price of road fuels, which the Government is committed to taking into account when considering decisions on fuel duties.'

Liberal Democrat shadow Chancellor Vince Cable criticised the Chancellor's announcement as a panic measure that will cost the Treasury hundreds of millions of pounds.

'The Chancellor is now so scared of appearing indecisive that he has been panicked into making a snap decision on fuel duty,' said Dr Cable.

'It is utter madness to make an early decision when no one knows either what the price of oil will be or what state the public finances will be in come the autumn.   

'Delaying the fuel duty increase until next spring will cost the Treasury an additional £550m. With the Government already £45bn in the red this year — and most likely losing revenue from stamp duty, corporation tax and income tax — how will this be paid for?'

Categories: News
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