Petrol retailers say cut fuel duty to cut inflation

‘With the price of fuel now clearly impacting on inflation, the time has come for the Chancellor to cancel the fuel duty increase scheduled for 1 April,’ said Ray Holloway, Director of the RMI Petrol Retailers Association (PRA), commenting on inflation figures announced today (Tuesday 12 February 2008).

January’s Consumer Prices Index (CPI) inflation figure rose to 2.2 per cent, up from 2.1 per cent in December 2007. The rate is the highest since June 2007. The largest upward pressure came from the price of fuel.

Holloway continues: ‘This outcome was inevitable and has formed the basis of all messages fed into the Chancellor by the PRA for some time. With the impact of rising duty now clearly affecting inflation, going ahead with the fuel duty rise on 1 April would be unwise, especially at a time when summer demand for fuels will be starting to push prices upwards.

‘Increasing fuel tax would mean further price increases for the consumer, and would almost certainly push a number of forecourt businesses out of business as a result. ’

Holloway adds: ‘Many fuel retailers are barely clearing costs. There are now less than 9,500 forecourts in the UK, including supermarket filling stations. This is the lowest number of filling stations in the UK since 1912. The situation could become critical if the total number of forecourts continues to drop at the rate of recent years. The Chancellor must recognise the effect that a duty rise would have and cancel it as soon as possible, as well as reviewing how and when small businesses pay Excise Duty on fuel supplies.’