By Mark Smulian
17 January 2011
Scotland’s finance secretary today called on the UK government to introduce a fuel duty regulator mechanism, under which increased North Sea oil income would be used to cut fuel taxes.
John Swinney said that government revenues from the North Sea could rise by £2bn this year if oil prices stayed at their present high level.
In a letter to Chancellor George Osborne, he said: ‘It is simply unacceptable that in energy-rich Scotland, motorists and businesses are facing pump prices that have reached over £1.40 a litre in some areas.’
Swinney said that taken with this month’s VAT increase, ‘these record fuel costs are putting a huge and unnecessary amount of pressure on our communities and on vital sectors of the Scottish economy’.
He wrote: ‘Prior to the general election both you and the prime minister advocated the introduction of a fuel duty regulator to protect motorists from temporary and unexpected increases in the price of oil.
‘The Scottish Government has long supported the introduction of a fuel duty regulator. Such a system would ensure that a proportion of the windfall from North Sea revenues the UK government receives from unexpected increases in oil prices is used to reduce fuel duty.’
Speaking to the BBC this morning, Prime Minister David Cameron said he wanted the government to give some consideration to a fuel price regulator and suggested the March Budget offered a good opportunity to do so.
‘I recognise the pain people are feeling when they fill up the car… We have a Budget coming up in less than eight weeks’ time. I want us to examine this idea,’ he said.
