Motorists hope for fuel duty relief

Friday, 14 January 2011 12:00 AM

By politics.co.uk staff

Speculation is growing that the next Budget could see the government reverse its plans to hike fuel duty yet again.

At present fuel duty is set to increase by another penny per litre from April 1st, despite the coalition's pledge to introduce a fuel duty stabiliser.

Unleaded could reach a high of £1.36 if the move goes ahead, prompting pressure from motorist organisations.

"It's not even a case of no pain, no gain, because when petrol goes up, duty receipts go down as people change their spending habits," Luke Bodset of the AA told the Mirror newspaper.

"There's plenty of pain but not much in the way of gain."

Yesterday David Cameron acknowledged that the government was in the process of assessing whether a fuel stabiliser could work.

"I am not pretending this is easy. It is difficult. A rising oil price also has some bad effects on your economy and can reduce revenue," the prime minister said in a joint press conference with French prime minister Francois Fillon.

"But should we look at ways of trying to share that pain, to share that burden? Yes, that's absolutely what we are doing."

One report suggested the government was considering making the issue the centrepiece of its Budget.

Chancellor George Osborne could slash fuel duty by 5p in a bid to provide relief for struggling drivers, the Daily Record newspaper claimed.

It quoted a senior Whitehall source as saying the government had "gone too far down the road now to turn back".

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