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| Tax rise fuels petrol price fears | |
| (about 7 hours later) | |
| Petrol prices could surge to near record highs from next week after the government's 2p rise in fuel duty came into effect on Monday morning. | |
| The 2p increase could push up the average price of unleaded petrol to about 98p, while diesel could exceed £1 if the cost is passed on to motorists. | The 2p increase could push up the average price of unleaded petrol to about 98p, while diesel could exceed £1 if the cost is passed on to motorists. |
| The increase, in line with inflation, was first announced in Gordon Brown's 2007 Budget when he was chancellor. | The increase, in line with inflation, was first announced in Gordon Brown's 2007 Budget when he was chancellor. |
| The duty rise comes amid soaring oil prices and high borrowing costs. | The duty rise comes amid soaring oil prices and high borrowing costs. |
| The Budget also outlined another rise of 2p a litre next April and a further increase of 1.84p in April 2009. | The Budget also outlined another rise of 2p a litre next April and a further increase of 1.84p in April 2009. |
| Everyone affected | Everyone affected |
| The AA has criticised the government's move, highlighting that petrol prices have risen steeply in line with the oil price, which surged to record highs past $83 a barrel last week. | The AA has criticised the government's move, highlighting that petrol prices have risen steeply in line with the oil price, which surged to record highs past $83 a barrel last week. |
| BP was the only petrol retailer to confirm before Monday that it would definitely pass on the 2p cost to drivers, while many of its rivals, including some of the big supermarket chains, said they would be ensuring that their fuel prices "remained competitive". | BP was the only petrol retailer to confirm before Monday that it would definitely pass on the 2p cost to drivers, while many of its rivals, including some of the big supermarket chains, said they would be ensuring that their fuel prices "remained competitive". |
| FUEL PRICE FACTS Fuel duty will go up by 2p from 1 OctoberIf the cost is passed on, petrol prices could reach £1 a litreIt will mean duty on diesel accounts for more than half of its cost, the highest in Europe | |
| Meanwhile, the Freight Transport Association (FTA) argues the 2p increase will see the annual operating costs of one 44-tonne articulated lorry rise by £870 to £35,600. | |
| At 50.35p a litre from 1 October, the duty paid on diesel in the UK is the highest rate in Europe, where the average level is 22.7p a litre. | |
| "Fuel represents a third of the operating cost of many lorries and significant increases in fuel prices are bad news for transport and thus for customers," said Geoff Dossetter, FTA director of external affairs. | "Fuel represents a third of the operating cost of many lorries and significant increases in fuel prices are bad news for transport and thus for customers," said Geoff Dossetter, FTA director of external affairs. |
| He argues the rise is a tax on industry that gets filtered down to consumers. | He argues the rise is a tax on industry that gets filtered down to consumers. |
| "Road transport costs constitute an ingredient in the price of almost everything we eat, drink and use every day and it is essential that we contain those costs as far as we are able." | "Road transport costs constitute an ingredient in the price of almost everything we eat, drink and use every day and it is essential that we contain those costs as far as we are able." |
| The planned fuel tax increases come seven years after protests at refineries against fuel tax levels in 2000 left Britain struggling for petrol supplies. | The planned fuel tax increases come seven years after protests at refineries against fuel tax levels in 2000 left Britain struggling for petrol supplies. |