Prime Minister David Cameron has said the government is looking at tackling the record high fuel prices following fuel duty and VAT rises this week.
Petrol prices have hit new record highs this week, and are 17.7p higher than this time last year.
And with the VAT rise posting the biggest one-day rise in fuel prices in a year on Tuesday, David Cameron said that the government was reassessing the idea of a fuel price stabiliser.
In the meantime, read our top five tips to battle increasing fuel prices.
Fuel price rise is “very painful and difficult”
David Cameron reignited suggestions of a fuel stabiliser when speaking at a Prime Minister Direct event in Leicester yesterday. This was previously a Conservative proposition that was dropped as part of the coalition agreement with the Liberal Democrats.
He said: “I accept this is very difficult. We inherited a whole lot of tax plans that the last government had in place. One was an increase in fuel duty and we have had to put that in place. And obviously with the increase in VAT as well – you can tell when you fill up the car, it’s £1.32 and higher and it is very painful and difficult.”
According to the Office for National Statistics (ONS), the price of both petrol and diesel was 1.4p higher on Monday than the previous week, and the figures did not include the 2.5% increase in VAT.
Cameron added: “I am working with the Treasury on this. Is there a way in which when the oil price goes up and the Treasury is getting more revenue out of oil we can find a way of sharing the risk with the consumer?
“If the price goes up, the tax comes down, and if the price comes down the tax goes up. I would love to find some way of sharing the risk of higher fuel prices with the consumer, rather than at the moment they feel they are bearing the burden. We are looking at this because I do want to help people.”
What is a fuel price stabiliser?
A fuel price stabiliser would cut fuel taxes if the cost of oil went up on the world markets. This would mean high oil prices – currently above $95 a barrel – would not be reflected on petrol station forecourts.
The price stabiliser has been on the agenda since 2008. However, as part of George Osborne’s June 2010 budget to work out if it was possible to fund a fuel stabiliser, the Office for Budget Responsibility (OBR) showed little support for the strategy, claiming that public finances were little affected by fluctuating fuel prices.
Saving money in the meantime
So, with fuel prices expected to remain at record highs, UK motorists are going to have to look to save money elsewhere.
Which? is offering some tips to help you battle the rising price of fuel.
1. Find the cheapest fuel in your area using petrolprices.com
2. Work out how economically you are driving using the Which? Car fuel economy calculator
3. Drive more efficiently using our eco-driving video and tips to help save fuel
4. Look to save elsewhere on your motoring costs using our guide
Which? Car Survey 2011
Which? Car wants to know more about your car. If you fill in the questionnaire online, you’ll be in with a chance of winning £5,000.
Last year, we had responses for over 60,000 cars, helping us determine the carmakers you can trust – and those you can’t. We’ve fed the results back to carmakers and they’ve listened to us. So your input is vital to keep customer satisfaction as a priority for carmakers and dealers. Find out more about the 2010 Car Survey results here