The Chancellor Gordon Brown brushed aside protests from motorists yesterday by announcing that next month's 6p-a-gallon increase in fuel duty would go ahead, despite fears that higher crude oil prices could lead to even more expensive petrol.
Confirming the 1.28p a litre increase in duty, the Treasury said it was going ahead with the move because the situation in the Middle East had "calmed down" and oil prices had become more stable.
The increase was deferred from the Budget in April because of the uncertainty caused by the war in Iraq.
But the AA described the increase as "an appalling state of affairs for UK drivers" adding: "There is no justification for rise in fuel duty given that the situation in the Middle East is still extremely volatile".
The Shadow Chancellor Michael Howard said the move showed Mr Brown was "desperate to find more money to fill a black hole in the nation's finances".
Crude oil prices edged further upwards yesterday following the shock move on Wednesday by the oil-producing cartel Opec to cut production by nearly 1 million barrels a day. Brent crude for delivery in November rose by 20 cents to $26.87.
Motorists are now braced for an increase in the price unleaded petrol to as much as 80p a litre next month compared with 74.6p in July - a rise of 15p a gallon. But the Treasury played down the significance of Opec's cut in output describing it as "small" and highlighted the cartel's forecast that oil prices were likely to remain near the middle of its $22-$28 price range into next year. A spokesman also pointed out that since 2001, petrol duty had fallen 13 per cent in real terms. The Chancellor cut fuel duty that year following the nationwide fuel protests the previous winter and froze it for the following two years.
The AA said that together with VAT, next week's rise in fuel prices would be about 1.5p a litre or 6.8p a gallon - an extra £23 a year for the motorist doing an average 10,000 miles a year.Reuse content