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Fuel duty increase postponed

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Issued 16 July 2008

The Chancellor of the Exchequer, Alistair Darling MP, today announced that he is postponing the 2 pence per litre increase in fuel duty that was expected to take place on 1 October 2008.

As a result of this decision, main road fuel duty rates will remain at 50.35 pence per litre after 1 October this year. This is 17 per cent lower in real terms than in 1999.

Consequential, planned increases in road fuel gases, biofuel duty rates and rebated oils rates will also be postponed.

Alistair Darling said:

"The global credit crunch and sharp rises in world oil prices have pushed up prices at the pump. Today's decision will help motorists and businesses get through what is a difficult time for everyone."

This measure is taken in response to sharp rises in world commodity prices, with the price of oil almost doubling over the past year to reach a real-terms record high of $146 a barrel recently. This has inevitably had significant knock-on effects on the price of road fuels, which the Government is committed to taking into account when considering decisions on fuel duties.

Postponing the planned increase in fuel duty is also consistent with the Government's commitment to support the Bank of England in maintaining low inflation. Future rate decisions are a matter for the Budget.

Notes for editors

If fuel duty had risen in line with inflation since the end of 1999 it would now be around 60 pence per litre, and if it had risen in line with the escalator it would be close to 80 pence per litre.


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Crown Copyright. Material taken from HM-Treasury. Reproduced under the terms and conditions of the Click-Use Licence.



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Article Published/Sorted/Amended on Scopulus 2008-07-24 07:51:07 in Economic Articles

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