RMIP chairman Brian Madderson has written to the Daily Telegraph complaining about "misleading" information provided by Justin King, CEO of Sainsbury’s. King wrote a piece for the Business Section of the newspaper on August 23 which contained, what Madderson claims was "misleading information about the amount of the pump price for fuel going to the Treasury".

In the letter Madderson said: "The UK average price for unleaded petrol, as calculated by Experian Catalist, was 134.46ppl on the day in question. Duty is currently 57.95ppl and VAT at 20% amounts to 22.41ppl with arguably the Road Transport Fuels Obligation (RTFO) adding a further 0.79ppl. Thus the average taken by the Treasury is 81.15ppl which is 60% NOT 80% as claimed by Mr King. However, we agree that the actual taxation is still too high for consumers and business alike."

He explained that RMI Petrol had been critically involved with lobbying government to address fuel taxation earlier this year. "We should give credit to the Chancellor for listening and taking action," he wrote. "Lest people forget, in his Budget from April 1, he not only deferred the duty ’escalator’ of 1ppl ’in real terms’ inherited from the previous government, which would have increased duty by at least 5ppl, he also cut duty by 1ppl. Without such action, pump prices today would be 6ppl higher than we currently pay.

"The 1ppl could be subject to a ’fuel stabiliser mechanism’ as promised by the Prime Minister. RMIP has recently had discussions with HM Treasury on their proposals to introduce this element only if the price of Brent Crude oil falls below US$75/barrel over an agreed time period. Eliminating the 1ppl would be a positive step.

"However, we all need to bear in mind that the Chancellor only deferred the fuel tax pain as he plans to introduce the inflationary element again from January 1, 2012 and ’in real terms’. With RPI now projected to exceed 5.5% by the end of the year, the Duty increase could be over 3.20ppl plus VAT at 20% so forcing up pump prices by a hefty 4ppl. Then he has warned of a similar increase from 1 August 2012 which would see fuel taxation rise by a further 8ppl in just seven months.

"We will be campaigning strongly for the Government to re-think their plans for fuel taxation as it is evident that volumes have decreased sharply in recent months. The fiscal belt-tightening is impacting on household budgets and through to businesses as well. The overall tax take may actually reduce if these tax hikes next year further hit fuel volumes."

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