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Budget 2011: Drivers say fuel prices went up in advance | Budget 2011: Drivers say fuel prices went up in advance |
(about 2 hours later) | |
By Simon Gompertz Personal finance correspondent, BBC News | By Simon Gompertz Personal finance correspondent, BBC News |
George Osborne's instant 1p reduction in fuel duty was a genuine surprise, but drivers have been contacting the BBC to accuse their local garages of raising prices in advance. | George Osborne's instant 1p reduction in fuel duty was a genuine surprise, but drivers have been contacting the BBC to accuse their local garages of raising prices in advance. |
So instead of paying less to fill up their tanks, they are paying more. | So instead of paying less to fill up their tanks, they are paying more. |
Nye Davis from Basingstoke noticed that his nearest garage had raised the price of diesel by 2p yesterday, from 139.9p a litre on Tuesday to 141.9p. | |
Petrol retailers said the price they pay for fuel had been rising. | Petrol retailers said the price they pay for fuel had been rising. |
"I was pretty angry and upset," Mr Davis said. "To the consumer it sends out completely the wrong message." | "I was pretty angry and upset," Mr Davis said. "To the consumer it sends out completely the wrong message." |
Other drivers reported that they had seen prices go up by a penny, so the cut in duty simply puts them back where they were a few days ago. | Other drivers reported that they had seen prices go up by a penny, so the cut in duty simply puts them back where they were a few days ago. |
Petrol retailers respond that they have faced a rise in their own costs this week, which they have had to pass on to drivers. | Petrol retailers respond that they have faced a rise in their own costs this week, which they have had to pass on to drivers. |
"In the last three days the price of diesel has gone up by a penny a litre and unleaded is up by 2p," said Brian Madderson of RMI Petrol, which represents 6,000 independent retailers. | "In the last three days the price of diesel has gone up by a penny a litre and unleaded is up by 2p," said Brian Madderson of RMI Petrol, which represents 6,000 independent retailers. |
While supermarkets and some oil companies purchase supplies a week or more ahead, his members tended to buy fuel from day to day, he said. | While supermarkets and some oil companies purchase supplies a week or more ahead, his members tended to buy fuel from day to day, he said. |
Cost spillover | Cost spillover |
Political instability in the Middle East and North Africa has been putting upward pressure on the price of oil. | Political instability in the Middle East and North Africa has been putting upward pressure on the price of oil. |
As the price of crude has risen, the cost increases have spilled over to refined products such as petrol and diesel. | As the price of crude has risen, the cost increases have spilled over to refined products such as petrol and diesel. |
The average price of fuel on the forecourt has crept up inexorably over the last month according to Experian Catalist, an information firm which tracks the market. | The average price of fuel on the forecourt has crept up inexorably over the last month according to Experian Catalist, an information firm which tracks the market. |
Unleaded petrol was 133.53p on average yesterday, 4.5p higher than a month ago. Diesel was an average of 140.26p, a rise of nearly 6p. | Unleaded petrol was 133.53p on average yesterday, 4.5p higher than a month ago. Diesel was an average of 140.26p, a rise of nearly 6p. |
Another complaint from fuel buyers is that the 1p duty cut simply hasn't been passed on as promised. | Another complaint from fuel buyers is that the 1p duty cut simply hasn't been passed on as promised. |
The chancellor said in his Budget speech that the cut in duty would take effect at 1800GMT. | The chancellor said in his Budget speech that the cut in duty would take effect at 1800GMT. |
However, a number of drivers reported no change in prices on their local forecourts, either last night or today. | However, a number of drivers reported no change in prices on their local forecourts, either last night or today. |
Brian Madderson said that the lack of movement was entirely the chancellor's fault. | Brian Madderson said that the lack of movement was entirely the chancellor's fault. |
"We did say [to the government] don't implement any cut until 1 April," he explained. "They haven't listened to us." | "We did say [to the government] don't implement any cut until 1 April," he explained. "They haven't listened to us." |
Paid upfront | Paid upfront |
Garages buy their stock duty-paid. So implementing a duty reduction immediately leaves them out of pocket. | Garages buy their stock duty-paid. So implementing a duty reduction immediately leaves them out of pocket. |
It could take a day or two for a busy retailer to use up all the stocks it holds in tanks under the forecourt. A rural garage might not need to buy more petrol and diesel for a week. | It could take a day or two for a busy retailer to use up all the stocks it holds in tanks under the forecourt. A rural garage might not need to buy more petrol and diesel for a week. |
In his Budget the chancellor scrapped the policy of raising fuel duty by inflation plus a penny each year. | In his Budget the chancellor scrapped the policy of raising fuel duty by inflation plus a penny each year. |
Duty will still go up in line with inflation, but this April's inflation increase will be postponed until January next year, giving motorists a nine-month breathing space in addition to last night's one-off cut. | Duty will still go up in line with inflation, but this April's inflation increase will be postponed until January next year, giving motorists a nine-month breathing space in addition to last night's one-off cut. |
Without Mr Osborne's decision, petrol and diesel would have been 6p more expensive per litre from April. | Without Mr Osborne's decision, petrol and diesel would have been 6p more expensive per litre from April. |
The reductions will be paid for by a £2bn windfall tax on North Sea oil producers. | The reductions will be paid for by a £2bn windfall tax on North Sea oil producers. |
But Labour has questioned the tactic, predicting that the producers will recoup their losses by adding to the price of fuel. | But Labour has questioned the tactic, predicting that the producers will recoup their losses by adding to the price of fuel. |
Ministers have poured scorn on the claim, pointing out that the fuel business is so competitive that oil companies will find it hard to make back their £2bn on the forecourt. | Ministers have poured scorn on the claim, pointing out that the fuel business is so competitive that oil companies will find it hard to make back their £2bn on the forecourt. |
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