Leading Article: Encourage the End of Our Reliance on Fossil Fuels ; FUEL PRICES

The Independent (London, England), September 14, 2005 | Go to article overview
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Leading Article: Encourage the End of Our Reliance on Fossil Fuels ; FUEL PRICES


They're back. As in the autumn of 2000, a motley collection of farmers, hauliers and aggrieved motorists is threatening to bring chaos to Britain's roads and forecourts. As ever, they believe they have a simple and just case. They claim that the soaring price of petrol is destroying their livelihoods, and point out that half of the price of every litre of fuel sold goes to the Treasury in tax. The only solution, in their eyes, is for the Chancellor, Gordon Brown, to cut the fuel duty.

Unfortunately these protesters are labouring under a delusion. Unlike in 2000, the rising price of fuel has nothing to do with the Chancellor. The duty on fuel has been frozen since October 2003. Tax actually constitutes a smaller percentage of the retail price of petrol than it did five years ago. Mr Brown is taking proportionately less " not more " from the motorist's pocket.

The steep rise in fuel prices is a result of events outside Britain. Rapid economic growth in China and India is increasing the demand for crude oil. The US remains as voracious a consumer of energy as ever. Instability in the Middle East has pushed up prices. And last month, Hurricane Katrina knocked out 10 per cent of US refining capacity. All this " not the greed of the Chancellor " is the reason petrol prices have edged above pounds 1 a litre for the first time. The idea, peddled by the protesters, that the Chancellor can wave a wand and create lower motoring costs for ever is risible. The price would probably come down in the short-term, but fuel prices will always ultimately depend on the global availability of crude oil.

What these protesters are in effect demanding is a subsidy. Yet such subsidies already exist. Only half of the fuel sold in the UK pays duty at the full rate, thanks to a range of discounts and exemptions. Many of the farmers threatening to participate in motorway 'go-slows' today run their vehicles on duty-free diesel.

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