Debate continues over fuel stabiliser

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Car Rental News - 18/01/2011


A rift seems to have appeared between the PM and the Treasury over plans to lessen fuel cost pains.

British Prime Minister David Osborn has repeated his support for the idea of a fair fuel stabiliser, despite admitting that the Treasury was against the proposal. The PM said he is eager to bring in a mechanism that would bring down fuel duty when the price of oil pushes fuel costs too high.

Speaking on Friday, Mr Cameron said that he favoured the idea of a fuel stabiliser. The plan is to have a system under which the Treasury can collect higher duties when the fuel price goes up but the question is how much extra can go to the Treasury.

Mr Cameron said the idea was to let the motorist, already under great pressure from rising costs, share in some of that extra benefit. However, as he pointed out, the government still needs to collect enough revenues to help pay off the deficit.

The Prime Minister volunteered the upcoming Budget in March as an opportunity to make some adjustments to the levels of duty charged on fuel. He said he hoped the government would be able to make progress on the matter. On many forecourts, the price of petrol has exceeded £1.30 per litre.

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