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Call for fuel tax rise to be axed

The increase in fuel duty could make British firms less competitive
More than 700 businesses have called on the chancellor to scrap a planned rise in fuel duty.
The increase of 2p per litre, due to take place in April, will cost the haulage industry £170m, they say.

Fuel duty went up by 2p a litre in October, and the average price of a litre of unleaded is now over 104p.

In a letter to Alistair Darling, the companies said the higher fuel tax would make British hauliers less competitive than their European rivals.

The planned duty rise comes as oil prices hover near $100 a barrel.

"We are alarmed by the signals that the government appears to be sending to such a crucial industry at a time when the economy appears to be stalling," the letter said.

The British Chambers of Commerce said the government must urgently reconsider the tax.

"This is yet another tax on business which further erodes our international competitiveness," said David Frost, director general of the BCC.

A further increase in fuel duty of 1.84p is due in April 2009.

The planned fuel tax increases come after protests at refineries against fuel tax levels in 2000 left Britain struggling for petrol supplies.

The Treasury said fuel duty rates announced in the Budget for the next three years, had provided "certainty" for business and sent the right environmental signals in the fight against climate change.

A spokesman said: "After these changes, by 2010 main fuel duty rates will be 11% lower in real terms than they were in 1999.

"The changes were made alongside reforms to vehicle excise duty that cut rates for less polluting vehicles and a number of measures to support hauliers which they have welcomed."

I wrote to Alistair Darling a few years ago, inquiring as to why diesel costs more than petrol, in Britain, whereas in most other European countries, diesel is only about ¾ the cost of petrol.

Diesel use to be cheaper in the UK, it’s only because allot more people started buying Diesel cars, and that the government couldn’t loose out on taxes, that it went higher than petrol.

Diesel used to be cheaper in the UK because the tax was lower. The tax on diesel and petrol was equalised in the early 90s. Diesel is not more expensive because the government tax it more.