Commenting on the price of oil hitting $100 a barrel yesterday, Gareth Elliott, Policy Adviser at the British Chambers of Commerce, said:
"With the price of a barrel of oil hitting $100 yesterday, the pressure on businesses who need to use vehicles continues to grow. Businesses are not going to be able to hold off passing on these increased costs to their customers for much longer. With this in mind, we find no justification for the 2p rise in fuel duty set to happen in April that would raise £983m if fuel sales in 2008/09 match those of 2007/08. The overall impact at the pump of the two fuel duty rises totaling 4p on a litre in 2008/09 would burden the transport industry and the motorist with an additional tax £1.97 billion in the next financial year due to this tax alone."By the end of March the Government will have received an unexpected windfall of £1.7 billion from high oil prices since it increased fuel duty by 2p in October 2007, due to an under estimate of the price of a barrel of oil in the Treasury’s modelling. If oil prices remain high in 2008/09 the Government might reasonably be expected to raise £3.4 billion over the next twelve months, far exceeding the £983m amount that April’s planned increase of 2p would raise. The Government needs to recognise that not only is this tax rise completely unnecessary, but hitting businesses with another tax rise in the current economic climate will merely succeed in harming the UK's competitiveness."