Overview

Earlier this year, the average price for a litre of unleaded petrol hit an all time high of 95p. UK petrol prices are among the highest in Europe, which is primarily due to the huge amount of tax we pay on petrol; currently set at 73 per cent of the total cost.

We understand fuel duty is an important source of Government revenue; however, the current infrastructure promotes lack of transparency and stability in fuel pricing, which is deterring small business investment.

The FPB has, in the past, proposed a scheme that would link the duty charged on vehicle fuel to the price per barrel available on the international open market. Under the proposal, duty would be set at a level to deliver a target price at the pump. As the international price of oil rises, duty will fall, and as the price of oil falls, duty will rise.

This scheme would allow the price of fuel inclusive of VAT and duty to remain broadly constant. More importantly, it would deliver stable prices, thereby empowering business owners to be confident in their business decision-making process, from which the UK economy would only benefit.