The PRA has accused the government of imposing “hidden green stealth taxes” on its members and drivers after it unveiled proposals to increase the Renewable Transport Fuel Obligation (RTFO) buy-out price for fuel suppliers.
It also said the existing scheme was not fit for purpose and called for it to be reformed.
The RTFO requires fuel suppliers to include a proportion of biofuels in their petrol and diesel, but they can buy out their obligation at a price set by the government.
As biofuels are currently far more expensive than petrol and diesel the Department for Transport has said in a consultation: “There is a greater risk that suppliers may ‘buy-out’ of their obligations to supply renewable transport fuel. This would result in lost greenhouse gas savings plus impacts on the UK biofuels industry.
“To combat this threat, we propose increasing the RTFO buy-out price to ensure the continued supply of biofuels and other renewable fuels.”
In his response, PRA chairman Brian Madderson explained: “Under the terms and conditions of their contracts the oil companies have the right to vary the pricing of the fuel as dictated by the RTFO. Therefore regardless of the cost of the “buy out price” our members are forced to pay it.”
He added that this means PRA members have no choice but to pass on the increased costs to their customers.
In addition, he said the oil companies do not explain the scheme well to PRA members, and often their account managers don’t understand it and the letters of explanation vary from poor to almost incomprehensible.
He also warned that there was a potential profit incentive for fuel suppliers as their customers have to buy their fuel including the full costs of biofuels not the cost of the buy-out.
He concluded by calling for a less complicated and more transparent and fairer way to tackle the issue and urged the Government to look at the way other countries, such as Germany, have implemented dealt with it.