Tuesday 4 January 2011

Treasury provides a not so happy new year, Good Garage Scheme reads.

Prices of petrol at the pumps have been soaring for months but motorists are now facing fresh misery as we start 2011 with increases in both VAT and petrol duty within the first week. This time last year saw an average price for a litre of unleaded petrol at 107 pence while now it is up to as much as 124p.

Professor Stephen Glaister, director of the RAC Foundation said:  "It is a bleak mid-winter for motorists with already record petrol prices set to rise significantly with the fuel duty and VAT increases. And that won't be the end of it with more increases in fuel duty already scheduled for April."

"Given that each penny increase in fuel duty raises about an extra £500 million for the Exchequer, it is easy to see why the Chancellor is tempted to hike rates. But if the nation's 34 million motorists are pushed too far they will drive less and the Treasury could actually see their tax take fall. At the election there was much talk about a fuel duty stabiliser. Drivers will rightly be wondering what happened to that idea."

The Freight Transport Association added: "the fuel duty rise on January 1 would leave the freight industry "with a £95 million hangover".

Motorists have a right to ask – when will all these rises end?

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