Saturday, January 1, 2011

New Year fuel duty rise leaves lorry drivers facing 'a £95m hangover

New Year fuel duty rise leaves lorry drivers facing 'a £95m hangover : CAR owners in some parts of Scotland face paying £7 for a gallon of fuel in 2011, a leading motorist organisation has warned. Soaring oil costs and government tax rises are predicted to push fuel prices to a new high this year, amid fears rural motorists will suffer most from the increases.

The £7 prediction, made by the Institute of Advance Motorists, follows an AA report suggesting that next year diesel will pass a £6 gallon average across Britain. But in Scotland, many motorists will face prices that could touch £1.54 a litre, or £7 a gallons, particularly in remote areas.

Neil Greig, policy and research director of the Institute of Advanced Motorists, said: "I can see the price of diesel potentially hitting £7 a gallon next year. It means that people are going to have to start downsizing their cars and learning how to drive more efficiently."

And concerns have been raised that a new scheme to help rural communities, which will be tested in the Highlands, will be too slow to alleviate the impact and may not go far enough.

A UK government fuel duty rise coming in today will put 0.76p on the price of a litre of petrol and diesel. The increase in VAT to 20 per cent on Tuesday will mean pump prices go up even further.

The AA estimates the two increases will add around 3.5p to the cost of a litre of petrol and diesel.

AA figures show that at present a litre of petrol costs an average of 123.98p a litre, with diesel at 128.20p. This time last year petrol was at 107.74p a litre and diesel at 109.46p.

A further increase of 1p in fuel duty in April will hit motorists further and the AA is concerned that, with the price of a barrel of oil expected to go well over $100, motorists are going to be even worse hit.

The AA has estimated that motorists - even before the two latest increases - are spending almost £10 million more a day on petrol than this time a year ago and expect this to rise to £12m.

An AA spokesman said: "The price of diesel will almost certainly average £6 a gallon in the UK, and it will be much worse for rural communities in Scotland.

"People are paying the price for the government wanting to use fuel duty and VAT to fill the deficit and greedy oil speculators on the world markets."

Brian Madderson, chairman of RMI Petrol, which represents the 6,000 independent forecourts across the UK, said he did not believe the government realised the impact of its decisions. He pointed out that 500 forecourts a year are already shutting.

"This is the biggest increase in years as a result of the VAT rise on top of the fuel duty rise," he said.
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