Industry in Budget fuel call to Brown

THE motor industry has called on Chancellor of the Exchequer Gordon Brown to maintain the freeze on fuel duty at the upcoming Budget, as the crisis in the Middle East puts more pressure on the already high cost of fuel in the UK.

The AA's Fuel Price Report for March confirmed that unleaded prices had risen by 2.1pence per litre to 73.3ppl and diesel by 0.5ppl to 75.9ppl, hitting the bottom line of fleet budgets.

Last week, BP cited rising production costs for adding a further penny to the price of a litre of unleaded petrol on its 1,300 forecourts, taking it to 74ppl.

Richard Freeman, policy spokesman for the AA, said: 'Because of our (the UK's) high levels of taxation, we are affected more than other countries by the rises in oil prices.

'The Government cannot control what happens in the Middle East. We would hope the Chancellor of the Exchequer would not increase duty at the Budget. It is too risky at the moment.'

Edmund King, executive director at the RAC Foundation agreed, commenting: 'Brown will have to be incredibly cautious.

'Events in the Middle East will cause upward pressure on prices and I think we will see increases in the coming months.'

However, Freeman and King also cautioned against hysteria, with pump prices at their lowest for three years following an 18 month long freeze on duty at its current level.

Brown had pledged to hold it there until this spring, and to continue to do so if prices remained high. British fuel is among the cheapest in Europe pre-tax, but the most expensive after tax following the 80% levy added by the Government.

What do you think? Email fleetnews@emap.com

AA fuel price fact file

Country - Unleaded (ppl) - Diesel (ppl) Austria - 52.89 - 44.90
Belgium - 62.12 - 47.36
Czech Republic - 48.03 - 43.20
Denmark - 71.08 - 55.46
Finland - 61.50 - 47.97
France - 59.04 - 45.51
Germany - 63.96 - 51.05
Greece - 43.67 - 39.98
Netherlands - 70.73 - 49.20
Hungary - 56.71 - 53.26
Ireland - 49.82 - 46.13
Italy - 63.96 - 62.89
Luxembourg - 47.36 - 38.75
Norway - 75.45 - 68.97
Poland - 62.39 - 50.06
Portugal - 52.89 - 39.98
Spain - 49.82 - 43.05
Sweden - 63.84 - 58.79
Switzerland - 56.63 - 58.79
USA - 24.44 - 25.16
UK - 73.30 - 75.90