THE RMI has lobbied the Government today about what it sees as ‘the serious consequences of the proposed Duty increases’ at the next budget. In a letter to the Chancellor of the Exchequer, Brian Madderson, RMI Petrol Chairman details concerns for the independent petrol retailing industry ahead of the Autumn Statement. Although the previous Government’s “escalator” will be replaced by a “fair fuel stabiliser”, the precise mechanics of this new scheme have yet to be announced.
Road fuel volumes have plummeted since 2008 from a combination of high taxes and high global oil prices which produced record levels at the pump of 137ppl for petrol and 143ppl for diesel in May this year. Despite Brent Crude oil prices falling from around US$125/barrel to a recent low of US$100, wholesale prices to UK retailers in £/litre have remained stubbornly high, partly a result of the weakening pound sterling.
Brian Madderson commented “What remains as the backbone of this new “stabiliser” package is the “in real terms” inflation element plus VAT. A fuel duty increase of 3.02ppl (assumes RPI at 5.2%) was announced in the 2011 Budget for implementation on 1 January 2012 which with 20% VAT means an overall tax increase of 4.00ppl.”
The next fuel duty increase on 1 August 2012 seems set to follow the “stabiliser” format and with RPI forecast to peak in the New Year close to 5.5%, this could result in another 4.00ppl tax hike. If these proposed fuel duty increases were to be implemented, together they would add up to an eight pence per litre tax hike in just seven months – a level never before seen in the UK.