PRA argues fuel duty cut for economic boost
The Petrol Retailers Association has argued that a cut in fuel duty would help the UK economy tackle the twin challenges of a weaker pound and a stronger oil price. “A fuel duty cut will provide a reassuring boost to businesses and consumers alike”, said chairman Brian Madderson, in a letter to the chancellor following a recent meeting with Treasury officials.
“As I write”, Madderson continues, “the pound is down 27 cents on the dollar on the year, and the price of a barrel of Brent crude is up 4.0 per cent on the year.” The letter goes on to state that the Treasury is enjoying a £1bn duty windfall from petrol and diesel sales this year.
Madderson said the role of e-commerce should also be considered: “The very rapid growth of online deliveries is one of the cornerstones of the UK’s economic improvement. Road usage by Light Goods Vehicles (LGV) rose by a staggering +6.3 per cent in 2015.
“Pump prices are hitting consumers hard, resulting in an estimated £5bn reduced spend by consumers on an annualised basis. Average pump prices are 117 pence per litre (ppl) today compared to 114 pence in January 2016.
“The Treasury could regain up to £1bn in revenue by collecting more fuel duty from long haul hauliers. Foreign and returning UK hauliers are filling up on the continent due to lower diesel duty (20 to 30 per cent lower in Belgium and Luxembourg). Lower fuel prices in the UK would mean more money comes to the UK Treasury. The Border Force and DVSA could be given powers to fine lorries that are found to be overloaded with fuel, beyond say 300 litres.”
Madderson told reporters that he has met this week with Treasury officials and that he now “trusts that the Chancellor is warming to the idea of a fuel duty cut and that his Autumn statement will set the economy on the road to prosperity.”