Osborne hits back in row over petrol prices

Joe Churcher,Emma Hallett,Pa
Friday 04 February 2011 15:01

Chancellor George Osborne has refused to take the blame for rising petrol prices - rejecting claims by world oil producers that taxes were responsible.

Mr Osborne said drivers in the UK were "paying the price" for mounting oil prices and Downing Street said "non-tax factors" were mostly driving the cost at the pump.

He hit back after Opec secretary general Abdullah al-Badri told drivers to "blame your government" if they were unhappy at paying more to fill their tanks.

"Don't blame Opec, blame your government. It's not because of the price of oil; it's because of taxes," the head of the body, which represents 40% of world oil production, said.

Prices hit record levels again this week despite a fall in wholesale costs which the AA pointed out had seen pump prices fall in other European countries such as France and Germany.

On February 1, the average UK price for petrol was 128.65p per litre, with diesel at 133.38p.

That has helped sustain pressure on Mr Osborne to cancel a 1p duty rise due in April.

The Chancellor repeated his pledge to examine that option and said the Government continued to look into the introduction of a "stabiliser" mechanism to iron out big price fluctuations.

"Oil prices around the world have gone up a lot in recent months and you see that in many countries and, of course, unfortunately British drivers are paying the price for that at the petrol pump," Mr Osborne said when asked about the Opec head's comments.

"We want to see concerted international action to try and get the oil price down and the G20 is looking at that," he said during a visit to a high-tech manufacturing firm in Cheltenham.

Prime Minister David Cameron's spokesman said: "Clearly if the oil price goes up, that is going to impact on the price at the petrol pump.

"If you look at the recent rises in petrol prices, the majority of the increase is accounted for by non-tax factors."

An AA spokesman said: "Everybody wants a slice of the cost of oil and fuel. At the end of the chain is the motorist and businesses who can't protect themselves.

"What we need is transparency in the market so that we can see who is taking the biggest chunks and a fuel stabiliser to balance high prices."

Public suggestions on dealing with fuel prices would be among those considered ahead of the budget if people used a new online system to submit them, Mr Osborne said.

Ideas are being invited via the Treasury's website and will go "direct to the desks" of officials working on the March 23 Budget, it said.

"We want to hear people's ideas about how to grow the British economy, also listening to people on issues like fuel duty and hear what they have to say," the Chancellor said.

"I understand how squeezed families feel and I'll be listening to them and looking at all the options."

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