Halve fuel VAT to protect consumers from soaring prices, petrol retailers demand Business News

Petrol retailers have urged Boris Johnson’s government to halve fuel VAT to ease pressure on consumers as prices soar amid Vladimir Putin’s war with Ukraine.

The price of gasoline hit a daily record on Wednesday, with motorists paying an average of 159.6 pa liters on forecourts, compared to 158.2 pa on Tuesday.

Diesel was also at a record high of 167.4p on Wednesday, down from 165.2p the previous day.

The rise in prices is due to increases in the wholesale price of crude oil caused by uncertainty over supplies as the conflict in Ukraine enters its third week.

Crude oil prices fell slightly after the United Arab Emirates, an influential member of the OPEC group of major oil-producing nations, said it supported an increase in production.

But there are fears that the disruption of supplies in Russia, one of the world’s biggest oil producers, could push fuel prices even higher.

“As we have seen over the past few weeks, a rise in global oil prices will continue to affect UK petrol pumps,” said Gordon Balmer, executive director of the Petrol Retailers Association (PRA). The Independent.

“The international situation remains fluid and motorists continue to feel the pressure of price increases,” he added. “In response, the PRA is urging the government to reduce the level of VAT on fuel by 50% to reduce pressure on consumers.

UK motorists currently pay a standard rate of 20% VAT on the cost of most fuel.

Earlier this week the Prime Minister dodged calls from Labor leader Keir Starmer for more help for families struggling with their bills.

UK forecourts sold petrol at an average price of 159.6p a liter on Wednesday

(PA Archive)

Mr Johnson and Rishi Sunak, the chancellor, also rejected opposition demands for a windfall tax on oil and gas giants, which saw their profits soar at the height of the Covid pandemic.

Both say a single tax on such businesses would discourage investment in the UK.

“Yes, he is absolutely right that we have to deal with the long term impacts of soaring energy prices and that is why I will be presenting an energy independence plan for this country over the next few days to make sure we undo some of the damage done by previous decisions,” he told Labor leader Keir Starmer.

On Thursday, the Irish government announced it was reducing excise duty – a form of consumer tax – on fuel following pressure from opposition MPs.

Analysts fear economic growth will be hit if fuel prices continue to rise.

“With exorbitant energy prices for an extended period, the risks of energy rationing and ultimately a recession are increasing day by day,” said Livia Gallarati, oil markets analyst at Energy Aspects.

A government spokesperson said: ‘The global price of crude oil has risen sharply over the past year, driving up petrol prices in countries around the world. It’s a global trend and not just in the UK. But we will do everything we can to alleviate this and to help the people of this country.

“The £12billion support we’ve already announced to help lower the cost of living includes a fuel tax freeze for the twelfth year in a row – the longest freeze in British history.”

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This notice was published: 2022-03-10 18:14:49

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