Knowledge Centre
14th January 2011
The Government must make good on suggestions that it will deliver a 'fuel duty stabiliser', according to the Federation of Small Businesses (FSB).
Escalating fuel prices - and fuel duty rates - are forcing small businesses to exist on a "knife-edge", the federation says. It is highlighting that the pre-election Conservative manifesto suggested that the party would introduce a measure to offset increases in petrol prices, and says it is "severely disappointed".
The call follows rapidly increasing prices already in January, as the planned fuel duty hike coincided with VAT rising to 20% - factors which are "putting further pressure onto already hard-hit small firms' cash-flow", the FSB says.
It says that, in real terms, fuel duty is set to rise by one per cent above inflation between April 2011 and April 2014, and worries that small firms will not be able to bear such high prices.
According to PetrolPrices.com, the average cost of a litre of unleaded petrol currently costs 128.10p - a record - while a litre of diesel costs 132.45p.
While the precise details are not known, if introduced, the stabiliser would mean that the Government reduces fuel duty as the underlying oil prices rise, and increases it as they fall - meaning that the price motorists pay at the pumps remains relatively constant.
The FSB suggests that the stabiliser could be set before each financial year, meaning there is an upper and a lower limit for prices - regardless of how volatile the oil market becomes. It says that this approach would give businesses certainty regarding how much they need to budget for fuel.
However, while David Cameron said in Prime Minister's Questions this week that the Treasury was considering the stabiliser as a means to share extra revenue from oil price rises "with the motorist who is suffering from high prices", motoring groups have expressed annoyance at the Government.
The RAC Foundation and the AA have both suggested that the stabiliser is an unnecessarily complex system, and the Government should simply cut fuel duty if it genuinely wants to lighten the load for motorists.
FSB national chairman John Walker said that the Government has "failed to deliver" as businesses struggle with the record fuel prices, which have come "at the most fragile of times".
"Small firms, such as the haulier and the taxi driver, will all be severely affected by this rise in fuel duty," he added.
"Unlike big businesses, they will have to pass the cost on to customers at a time when they already have to deal with the VAT hike.
"It is imperative the Government acts now and introduces the stabiliser to avoid a relentless flow of fuel duty increases that simply put small firms on a knife-edge."
IMAGE Danny Lawson/PA Wire
Whatever the prices at the pumps, let More Th>n insurance protect your business. Ask us for a cheap shop insurance quote today, or find out about our great value van insurance.
Government 'must introduce fuel duty stabiliser'
Escalating fuel prices - and fuel duty rates - are forcing small businesses to exist on a "knife-edge", the federation says. It is highlighting that the pre-election Conservative manifesto suggested that the party would introduce a measure to offset increases in petrol prices, and says it is "severely disappointed".
The call follows rapidly increasing prices already in January, as the planned fuel duty hike coincided with VAT rising to 20% - factors which are "putting further pressure onto already hard-hit small firms' cash-flow", the FSB says.
It says that, in real terms, fuel duty is set to rise by one per cent above inflation between April 2011 and April 2014, and worries that small firms will not be able to bear such high prices.
According to PetrolPrices.com, the average cost of a litre of unleaded petrol currently costs 128.10p - a record - while a litre of diesel costs 132.45p.
While the precise details are not known, if introduced, the stabiliser would mean that the Government reduces fuel duty as the underlying oil prices rise, and increases it as they fall - meaning that the price motorists pay at the pumps remains relatively constant.
The FSB suggests that the stabiliser could be set before each financial year, meaning there is an upper and a lower limit for prices - regardless of how volatile the oil market becomes. It says that this approach would give businesses certainty regarding how much they need to budget for fuel.
However, while David Cameron said in Prime Minister's Questions this week that the Treasury was considering the stabiliser as a means to share extra revenue from oil price rises "with the motorist who is suffering from high prices", motoring groups have expressed annoyance at the Government.
The RAC Foundation and the AA have both suggested that the stabiliser is an unnecessarily complex system, and the Government should simply cut fuel duty if it genuinely wants to lighten the load for motorists.
FSB national chairman John Walker said that the Government has "failed to deliver" as businesses struggle with the record fuel prices, which have come "at the most fragile of times".
"Small firms, such as the haulier and the taxi driver, will all be severely affected by this rise in fuel duty," he added.
"Unlike big businesses, they will have to pass the cost on to customers at a time when they already have to deal with the VAT hike.
"It is imperative the Government acts now and introduces the stabiliser to avoid a relentless flow of fuel duty increases that simply put small firms on a knife-edge."
IMAGE Danny Lawson/PA Wire
Whatever the prices at the pumps, let More Th>n insurance protect your business. Ask us for a cheap shop insurance quote today, or find out about our great value van insurance.
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