The Chancellor’s decision to press ahead with plans to levy the deferred duty increase of of 3.02ppl from August 1 this year was described as irresponsible by RMI Petrol chairman Brian Madderson.

Madderson said pump prices for diesel would reach 150ppl by Easter and petrol would be in the range of 150-155ppl by the summer. With VAT at 20%, he estimated this would result in a 4ppl rise in pump prices over and above any continuing increase due to global prices of crude oil.

"This is a deeply unpopular move by the government to force through a regressive fuel tax increase of this magnitude," said Madderson. "It is unwelcome and unhelpful, not just to the cash-strapped householder but to business and to the wider economy.

"We (RMI Petrol) have previously written to the Chancellor and Treasury pointing out that the Exchequer was already benefiting by an estimated £4bn extra fuel tax receipts since taking office. This resulted from the ongoing net duty increase of 1.76ppl, the rise from 15 to 20% VAT and the windfall gains of higher VAT on ever-increasing pump prices. Just a 5ppl price rise nets the Exchequer another £250 million per year from VAT.

"The Chancellor promised that reforms would produce taxation that is fair. There is nothing fair about fuel duty. It spells more misery for households, more misery for retailers as disposable income shrinks further, more misery for independent forecourt retailers as fuel volumes reduce, more fuel-related crime and more time before economic growth prospects are realised."