With spiralling car insurance rates and rising fuel prices driving up the cost of motoring, MPs are set to begin a debate on the subject after a 100,000 signature online petition was presented to the government recently.
Set to occur this week and slated for a three hour session, the session comes on the heels of strident protest over the government’s planned 3p a litre fuel duty increase set to go into effect in January of next year. This would raise the costs of topping off the tank of the average car in the UK by £1.50, and with motorists already suffering from increased motor car insurance costs, the thought of another 150p every fill up was enough to push many over the edge.
Petrol prices have risen by a factor of three over the past two decades, remaining within less than 4p of the record high seen this past May ever since. Motoring organisations say that the high prices are limiting economic growth and are causing businesses and ordinary motorists alike to endure financial hardship.
While the March Budget saw Chancellor George Osborne reduce fuel duty by 1p, this cut will be counteracted by an inflation-linked duty rise between April of this year and the same month in 2012. Now, the government is being strongly urged to consider price stabilisation, with Dave Watts, backbench MP, making the suggestion to reverse the VAT increase at the beginning of the year to reduce petrol prices by 3p a litre.
The AA sent a letter to the Chancellor, claiming that the Coalition government should link fuel duty considerations to the Consumer Price Index instead of the Retail Price Index. This is because fuel taxes push up the RPI, which then results in a ‘vicious cirle’ of inflation leading to more duty increases sometime down the road.