MPs voted unanimously last month to pass a motion demanding that the government puts the two fuel duty rises planned for next year on the back burner.
The House of Commons backbench debate united all political parties with MPs calling on the government to consider the feasibility of a price stabilisation mechanism that would work alongside the proposed fair fuel stabiliser to address fluctuations in pump prices.
The debate, which ran for four hours on the afternoon of November 15, was triggered by a FairFuel UK e-petition achieving more than 100,000 signatures. It was attended by more MPs than would normally be involved in a backbench session, with a total of 116 cross-party MPs given the chance to make impassioned pleas on behalf of their constituents.
Instrumental in pushing through the motion was Conservative MP for Harlow, Robert Halfon. In his opening address in the House of Commons he said: "This House welcomes the 1p cut in fuel duty at the 2011 Budget, the abolition of the fuel tax escalator, the establishment of a fair fuel stabiliser; however it believes that high fuel prices are causing immense difficulties for small- and medium-sized enterprises vital to economic recovery... and calls on the government to consider the effect that increased taxes on fuel will have on the economy; examine ways of working with industry to ensure that falls in oil prices are passed on to consumers; to take account of market competitiveness; and to consider the feasibility of a price stabilisation mechanism that would work alongside the fair fuel stabiliser to address fluctuations in the pump price.
He also said that tax was not the only problem: "There are suggestions that some of the big oil companies are behaving like a cartel, with a stranglehold over the market. Brian Madderson of the Retail Motor Industry Federation says that the small forecourts he represents are now forced to buy fuel from the big players at a set wholesale price on a daily basis rather than on weekly or monthly terms. There is no competition from wholesalers on these terms.
"The Enterprise Act 2002 gives Ministers powers to ask for an independent market study, and that is what we need."
Halfon continued his address, claiming that fuel prices are quick to rise but sluggish in coming down. "In the past four months, the price of oil has fallen by 8% but fuel prices have remained static. Oil firms protest that they are forced to buy raw materials in dollars and that currency fluctuations have made price cuts impossible, but analysis shows that this is not true.
"The cost of Brent crude has fallen by nearly 20% since April, and yet the dollar has risen by just 6%. Big oil firms should not hide behind currency fluctuations. Statistics from the UK Petroleum Industry Association, which is funded by the major oil companies, show that in early 2010 the price of crude oil fell steadily, and yet retail fuel prices stayed high. Why was that? Ultimately, the only way to resolve this is through open-book accounting."
As Forecourt Trader went to press, politicians and the industry were waiting to see how Chancellor George Osborne would address the MPs’ demands in his Autumn Statement on November 29.
Motoring journalist and TV personality Quentin Willson, spokesman for FairFuel UK, said: "MPs are unanimous that duty is causing despair. The government said they are listening let’s wait and see. More duty rises in 2012 would be electoral suicide."
In his latest blog on the FairFuel UK website, Willson added: "Rumours are swirling around Westminster that the government is trying to find ways of scrapping the 3ppl fuel duty rise planned for January one of our key demands. We will not know if these are true until the Chancellor gives his Autumn Statement.
"Whatever happens in the Autumn Statement, FairFuel UK will keep campaigning. Even if the 3p fuel duty rise is scrapped, petrol and diesel will still be scandalously expensive. If it isn’t scrapped, we will increase the pressure even further."
SNP transport spokesman Angus MacNeil MP, who wound up the backbench debate, said: "There was great unanimity about the direction of travel for fuel taxes in the chamber. Given all that was said, it would now be unthinkable for the Chancellor to put up fuel tax in January as this would harm families, jobs and investment. It would fly in the face of the sentiment of democratically elected Members of the House."
While Peter Carroll, founder of the FairFuel UK campaign said: "The Commons voted unanimously the government must now act."
Meanwhile, RMI Petrol chairman Brian Madderson echoed the sentiments of the MPs and again raised the plight of independent retailers in yet another letter to the Chancellor. He stressed that failure to axe the two fuel duty rises planned for 2012 would increase the current closure rate of independent forecourt operators, especially in the economically challenged rural areas.
VIEWS OF MPS
Alan Reid, Liberal Democrat MP for Argyll and Bute:
"The government has scheduled a fuel duty increase for January, because it was hoped at the time of the Budget that prices would have decreased by then. Prices show no sign of coming down, however, so I hope that the government will listen to everyone who has signed the motion and spoken in the debate, and not proceed with the January fuel duty increase."
Ian Paisley, DUP MP for North Antrim:
"Government taxation policy is encouraging fuel fraud, fuel laundering and fuel smuggling to the effect that the Exchequer is losing hundreds of millions of pounds each year."
Mark Garnier, Conservative MP for Wyre Forest:
"It is right that we are debating the overall cost of fuel duty to our economy, and it is right that we are looking for ways of reducing that burden. However, I want the oil companies to explain why they see fit to charge my constituents in Wyre Forest more for their motoring. Can they justify subsidising more urban areas, not just in the black country but in the country as a whole, at the expense of our semi-rural and rural communities? Can they please let us all know when they intend to remove that rural surcharge on fuel?"
Albert Owen, Labour MP for Ynys Môn:
"We need to look at the differentials between areas close to refineries and those on the periphery. I understand that a rebate is being considered for remote islands but, as has already been said, that does not help the many motorists around the coastal areas of the United Kingdom who are paying considerably more. It is time the government did something. I will back them when they do the right thing. They can consider whether more could be done on refineries. We need to look at transport costs and VAT, and we need to help the people today."
Russell Brown, Labour MP for Dumfries and Galloway:
"We are seeing price differentials and we are certainly seeing them with some supermarkets. Supermarkets drive the price in our local communities: prices tend to fix around what local supermarkets are bidding from their customers.
"Here we are getting towards the back end of the year and we see another price differential in the difference between diesel and unleaded petrol. The difference has gone up from what it was in the late summer about 2p or 3p a litre to up to 6p, 7p or 8p a litre today. I recognise that lies partly with the refineries, but surely in this day and age more investment should be forthcoming so that the price differential does not create an even greater problem for those who have decided to drive diesel vehicles."
Graeme Morrice, Labour MP for Livingston:
"When the government increased VAT to 20% in January, they contributed to a further increase in fuel prices. It was the wrong tax at the wrong time, and it has kept petrol prices high and hit economic growth. I support the call, along with my Labour colleagues, for a temporary VAT cut to 17.5%, which would immediately bring the cost of fuel down by about 3p a litre."