A warning that lower oil prices must be passed onto consumers by the Chancellor George Osborne is being interpreted as being aimed at the energy companies by PRA chairman Brian Madderson.
Yesterday the Chancellor tweeted “Oil price was $53 pbl last night - lowest in 5yrs. Vital this is passed on to families at petrol pumps, through utility bills and air fares.”
Madderson said: “I think this was aimed much more at the energy companies where oil is a major component of their costs. The average pump price for fuel is down 10.2ppl since December 1 so I think the Chancellor should be pointing to the filling station sector as an example of how lower oil prices can be passed on.”
He pointed out that the Government’s tax take on every litre of road fuel was 72% , and added: “Contrary to expert’s predictions of trend reductions in road fuel volumes due to factors such as dieselisation, more efficient engines and hybrid/electric vehicle development, last year fuel volumes showed a year-on-year increase of 1.5% - the first increase since 2008.
“This extra volume will produce an estimated windfall tax (excise duty at 57.95ppl) of more than £400m for 2014 – even more reason for the Chancellor to take immediate action and cut fuel duty by at least 2ppl, and ensure there are benefits to both the consumers and the economy.”