Tory measure calls for UK fuel tax to rise and fall with oil price

A FUEL duty stabiliser will go ahead following the Conservatives party's pre-election pledge to keep fuel prices stable by cuts in fuel taxes when oil prices are high and raising when prices fall, said UK Transport Minister Philip Hammond.

The UK Road Haulage Association welcomed the news "from a sector struggling with the highest diesel duty in Europe where British hauliers pay GBP12,000 (US$17,296) or more per truck per year compared to European counterparts.

"A similar, workable and cost-effective system was proposed four years ago. We supported it then and we shall be pressing for this consultation to take place as a matter of urgency," RHA chief executive Geoff Dunning told London's International Freighting Weekly.

"However sound the theory it should be met with caution, said Freight Transport Association (FTA) chief economist Simon Chapman, especially with the price at which petrol stabilises still to be set, and if artificially high to offset risk whether different solutions may be required," he said.

Mr Chapman agreed that on the face of it the stabiliser will cut operating costs for UK businesses but dynamics of oil price and the dollar/pound exchange are beyond government control.

"Its ability to influence either is limited," he said and suggests that duty paid by road haulage be de-coupled from that paid by the motorist.

This would tack on to a "pay-as-you-drive" charge for foreign hauliers using the UK road network already supported by the RHA.

Source: www.schednet.com