PLANS that would cut petrol by 5p a litre to shelter motorists from soaring oil prices were unveiled by the Conservatives yesterday.
George Osborne, the shadow chancellor, proposed a system of cutting the government's tax levy on fuel when oil prices were high – but increasing it when oil prices were lower to build up a "rainy day" reserve.
The party said that if this had been
introduced at the last Budget then fuel would currently be 5p a litre cheaper – saving £3.50 on a tank of petrol for a Ford Mondeo and £2.60 for a Vauxhall Astra.
The move – not dissimilar to a "fuel duty regulator" long advocated by the SNP, which the Tories helped to block in a Commons vote last week – is designed to put pressure on the Labour government at a time of high public concern over the cost of living.
Mr Osborne said a Tory administration would "share the pain" of fuel hikes by redistributing part of the estimated £6 billion tax windfall currently enjoyed by the Treasury from North Sea oil revenues.
The government's calculations are based on oil being $83.80 a barrel – but prices broke $145 last week.
Mr Osborne said yesterday: "At the moment fuel duty goes up even when the price of oil goes up. So instead of government helping you with the rising cost of living, they are actually adding to it. The government revenue flows in because the price of oil goes up."
His plans for a "fair fuel stabiliser" are out to consultation until December.
The full article contains 268 words and appears in The Scotsman newspaper.
