No respite from rising fuel pricesApril 1 fuel duty rise expected to go ahead

18 January 2011

Fuel pump

Annual fuel costs for families could go up an extra £210 if the April 1 rise goes ahead

It appears there will be no ease-up on rising fuel prices for the foreseeable future, following Treasury Chief Secretary Danny Alexander’s comments during an interview on the BBC’s Politics Show at the weekend.

The Liberal Democrat Cabinet Minister, who is in charge of the Coalition’s massive cuts programme, also admitted David Cameron’s proposed fair fuel stabiliser was ‘complicated’ and ‘difficult to achieve’. As a result, UK motorists are being warned to expect fuel prices to continue to soar, especially as ministers have rejected calls for the planned 1p rise in fuel duty, due to take place on April 1, to be scrapped.

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April fuel rise to add another £210 to annual fuel costs

During his interview on the popular BBC programme, Alexander said: 'We are looking at the idea of the fair fuel stabiliser as the Prime Minister has said. It’s a complicated idea and it’s difficult to see precisely how we achieve it, but it’s something we’re looking at very carefully to reduce the burden of fuel duty.

'We are also taking steps to put in place a fuel duty discount scheme for remote communities where the prices are absolutely higher.

'The proposal that we are considering is the one that has been put forward in the past, which is the idea of the fair fuel stabiliser. That has complications, not least to do with the revenue that we receive in the treasury.

'The country has this huge budget deficit. We can’t just sacrifice income willy-nilly.'

Alexander said the government was aware of the seriousness of rising fuel prices to family annual spending, but refused to rule out the proposed April 1 fuel duty rise, which could add an additional £210 a year on the petrol bill of a family with two cars.

'We recognise that for many families this is a serious issue,' he added. 'We are seeking to address that problem by looking at this idea of a fair fuel stabiliser, by taking steps to relieve the burden of fuel costs in the most remote communities, and in April we are already going to see the first step on the increase in the personal increase tax allowance – that will put £200 extra in the pockets of people going out to work, which will help people with precisely the burden of extra cost.'

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Fuel gauge

There is talk of a fuel discount for those in rural areas

Fuel duty discount for remote areas

The discount Alexander spoke about for those living in remote communities could cover rural parts of Wales and Scotland, and certainly areas like the Hebrides, the Northern Isles, and the Isle of Scilly.

The average cost of petrol is 132p per litre, but in rural areas it can be a lot higher.

According to the Alexander, the government has had talks with the European commission about a 5p-per-litre discount for those living in the most remote areas.

However, there are now fears that rural petrol stations could soon be a thing of the past as the higher fuel prices could force them out of business. 

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Around 2,000 rural petrol stations remain

Fuel pumps

Rural petrol stations face closures due to the rising prices

Brian Madderson, the chairman of the Retail Motor Industry Federation (RMIF) petrol division, predicted around 500 petrol retailers would go out of business in the next 12 months – most of these being rural – resulting in around 5,000 job losses.

Madderson said the RMIF had already seen a trend in rural areas of motorists preparing to travel an extra 30 miles to get cheaper fuel from supermarkets and large petrol groups instead of paying the extra cost to fill up at local garages.

'I fear the whole refuelling network in this country is now under threat,' he said. 'By the end of the decade there will be no retail petrol stations in country areas.'

Since 1990, there has been a drop of more than 50% in the number of petrol retailers. At the beginning of the 1990s, there were around 20,000 petrol stations. Today, there are just 8,850, with only 2,000 of these being classed as rural.

Watch our video for driving more economically to cut down on your fuel consumption

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