By Max Clarke
“It remains a mystery and a disappointment” writes RMI petrol retailers’ association head Brian Madderson, in a letter to Chancellor George Osborne “... that neither you nor your advisors have yet consulted with industry over the various proposals for fuel pricing... which have been raised by your government”.
With RPI inflation currently at 5.1% and garages charging upwards of 140 pence per litre (ppl), Britain’s four and a half million small and medium enterprises (SMEs); the backbone of the economy cumulatively responsible for 50% of the nation’s GDP and over half of total employment, will find themselves struggling for survival if Chancellor Osborne pushes ahead with a 1ppl increase in fuel duty.
Over the past year consumers, and therefore the businesses that serve them have felt the strain of the VAT hike, rocketing oil prices and RPI inflation and the Bank of England.
Unrest in Libya and across the Middle East has already triggered a spike in oil prices and, writes Mr. Maddeson, the figure could increase to $150 per barrel resulting in a crippling 165ppl at the pumps if measures are not taken, seriously affecting economy and our standard of lives.
The government’s need to reduce the budget deficit with its cuts programme, City sources suggest a £4.3 billion sum could be raised by increasing North Sea oil production, and a further £2.2 billion will be generated at the petrol pumps from the increased 20% vat- giving the government a total of £6.5 billion to finance the fuel duty stabiliser and to cut duty by Mr. Maddeson’s recommended 2% minimum.