The Petrol Retailers’ Association and campaign group FairFuelUK have called on the government to follow France in cutting petrol and diesel prices to drive the UK economy into growth.

The French government and the major oil companies have agreed to cut fuel prices by up to six euro cents per litre for three months to help drivers hit by a recent increase in prices.

Brian Madderson, PRA chairman, said: "The move by the French government is to be applauded. They have reacted quickly to rising fuel costs knowing that any further increases would impact negatively on their economy. It is imperative that the UK government follow their lead in the fight to restore our economy and bring us out of recession."

Quentin Willson, national spokesman for FairFuelUK, said: "We’re being embarrassed by the French! The UK has been in recession for ages, yet getting our government to recognise the damage to our economy of rising fuel prices has been as easy as translating Proust."

The move in France came as the price of Brent crude oil continued to surge. Since the end of June, wholesale prices have increased by 9ppl for petrol and by 10.6ppl for diesel. According to Experian Catalist figures, on August 30 the average price of petrol was 138.6ppl and 143.2ppl for diesel, which is only 4-5ppl off the record highs of 142.44ppl and 147.91ppl in April.

Meanwhile, a US-led seasonal demand surge for road fuel is said to have encouraged new speculation by traders, with shippers reporting a 10-month high in the volume of gasoline being moved from Europe to the US.

The PRA is also concerned that the government plans to levy the deferred duty rise of 3.02ppl on January 1, 2013 will be quickly followed by another planned rise of up to 2ppl on April 1, 2013. With VAT at 20% on both increases, government tax will push up pump prices by as much as 7ppl in the first few months of the year. Should there not be any downward correction to oil prices this Autumn, the spectre of 145-150ppl for petrol in early 2013 could return, said Madderson. "This could damage our economic recovery and hit the Bank of England’s hopes for reducing inflation levels," he said. "Government must start planning now to freeze all further fuel tax increases during the term of their Parliament."

A new campaign from the TaxPayers’ Alliance in conjunction with the PRA aims to put pressure on the Treasury to reduce taxes on fuel. See News Extra page 10.