Let me start by wishing all of you a very Happy New Year! Id like to think that there was chance of that sentiment being realised, but if youre a motorist Im not sure that 2011 actually holds out much hope for happiness.
Tax Rises on Fuel
The new year is not even a week old and yet weve already had two separate tax rises on fuel. On 1 January the fuel duty on petrol went up by 1p per litre and on 4 January VAT went up by 2.5 per cent, adding yet another 2.5p to a litre of fuel.
To make matters worse, this comes on top of prices which hit a record high just before Christmas, with motorists paying an average of 122.14p per litre in mid-December, 3.06p more than they had been only a month before. Diesel also rose by 3.12p in the same time, reaching an average of 126.19p per litre. In It means that were all paying about 7.00 more each time we fill up the tank and its about to get worse.
The sudden increase in December came about as oil prices rose steeply on the world market, passing the $90 a barrel mark and experts are predicting it will go even higher over the next couple of months, exceeding $100 per barrel.
In their election manifesto, the Conservatives promised to introduce a fuel price stabiliser which would help cushion the blow to the countrys 34 million motorists of fluctuating oil prices such as these which have caused the cost of a litre of petrol to rise by around 13.5p over the last twelve months.
It all sounded very laudable and in June the chancellor George Osborne announced that the Office of Budget Responsibility (OBR) had been instructed to devise a scheme in which the fuel levy imposed on motorists would take into account the underlying cost of petrol and diesel.
What this would mean in practice is that if petrol prices rose due to an increase in the price of oil, as they have recently, duty would be lowered accordingly. But despite the OBR having reported back, the scheme seems to have been conveniently forgotten.
Of course, it has nothing to do with the fact that a 1p increase in fuel duty means an extra 500 million for the Treasury.
Happy new year everyone.