Cameron dampens hopes of fair fuel stabiliser



David Cameron has warned motorists not to get their hopes up after he backtracked on the idea of introducing a "fair fuel stabiliser" to offset some of the painful recent rises in petrol prices.

He did not rule the plan out, but said that it was a "difficult issue" and warned the nation's drivers not to hold out hope for a lowering of prices at the pump.
Fuel costs are currently at record levels after the increase in duty of 0.9p that arrived in the New Year and the increase in VAT from 17.5 percent to 20 percent. Another fuel duty rise is planned for April, which could send the average above its current record level of 127.8ppl.

Of the fuel stabiliser, Cameron said: "It's something I've asked the Treasury to look at because when you're filling up the car and it's £1.30 a litre it is incredibly painful for families up and down the country and I understand that."

Speaking on The Andrew Marr show yesterday, Cameron said: "Obviously the last increase in fuel duty was one we actually inherited from the last Government. It was part of their plans and obviously the whole of the deficit has been so deep we haven't been able to cancel many of their tax plans.

"We've had to go ahead with most of them. I don't want to raise people's hopes too far because it is a difficult issue but the concept that when the oil price rises – and it has risen – if that yields extra revenue to the Treasury, is there a way of sharing the burden between the Treasury and the motorists? That's the idea."

The AA has said Cameron has to act one way or another – pointing to falling petrol sales as evidence that drivers cannot afford the current prices.

"Petrol sales were down six percent in 2009 over 2008, and 3.4 percent in the third quarter of 2010 so it is quite clear that motorists cannot afford prices as they are," said Edmund King, president of The AA.

While The AA is in favour of introducing the fair fuel stabiliser, it would rather see the planned tax rise panned.

"A more immediate step to take would be to go ahead and scrap the April rise in fuel duty," said King.
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