Fuel discounts demanded for motorists in rural areas
George Osborne has been warned rural motorists are hit hardest by spiralling prices at the pump as he comes under mounting pressure to order a fuel duty freeze in next month's Budget.
Conservative MPs will this week table a Commons motion urging the Chancellor to cancel a 3p-a-litre rise in fuel duty planned for September.
Families have suffered from a 6p rise in fuel prices since the start of the year, and the Chancellor has been warned action to bring tax on diesel and petrol under control is now more important than raising the income tax threshold – the coalition's top tax priority.
Neil Parish, Conservative MP for Tiverton and Honiton, has called on Mr Osborne to cap fuel duty again – and he also wants ministers to introduce a fuel discount for drivers in rural areas.
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At the autumn financial statement, Mr Osborne announced the Treasury was exploring the possibility of extending a 5p-a-litre cut to fuel being piloted in the Isles of Scilly and Scottish islands to remote areas on the mainland. Commentators believe rural Devon and Cornwall would benefit.
Mr Parish, who serves on the rural affairs select committee, said: "We don't want even higher prices than we have already got. Fuel duty is a tax on rural people that people in urban areas don't face. A car is essential in the country.
"What the Chancellor has already done is delay 10p of fuel tax from the last Labour government – and I will be pressing the Chancellor for another freeze."
Essex Conservative MP Robert Halfon, who has led calls for fairer prices at the pumps, has dubbed fuel duty a "toxic tax".
He said: "This Government has done more than almost any other in recent times to reduce the cost of fuel but we need to go further... in the long term, when the financial conditions allow, to actually cut fuel duty.
"When fuel duty goes up it's not just a tax on fuel because food prices go up, bus prices go up, it crushes businesses, it crushes families, it's a disincentive to work because people can't afford to drive to work."
The intervention came after the AA revealed that the average cost of petrol in the UK is 138.32p a litre, with diesel rising 4.78p from its mid-January price to stand at an average of 145.10p. Petrol has risen 6.24p a litre since early January, adding £3.12 to the cost of refilling a 50-litre tank.
The Chancellor has frozen or deferred duty rises since March 2011, when he cut it by 1p. He also scrapped Labour's so-called fuel duty escalator which automatically put up fuel duty by more than inflation each year.
The Treasury has declined to comment on whether further action was planned, saying it was a matter for the Budget, scheduled for March 20.