Rising fuel costs have long been a real concern for both firms and families. The recent hike in VAT and the threat of a further increase in fuel duty have only added to the worries.
One possible solution is the introduction of a fuel duty stabiliser, but some critics have doubted whether such a system would be workable. However, the Federation of Small Businesses (FSB) has argued that a stabiliser, far from being complicated and unwieldy, would be simple and affordable.
Basing the stabiliser on the oil price cycle would enable the level of fuel duty to be calculated against a trend price for oil. This would then be adjusted at regularly timed intervals following changes in the oil price cycle, the FSB report claimed. Fuel duty would, therefore, be x pence per litre minus a proportion of the difference between the current oil and trend oil price.
FSB research has shown that the rise in fuel duty and uncertainty over fuel prices will have a significant impact on small businesses.
John Walker, the FSB’s national chairman, commented: “Critics have said that the fuel duty stabiliser is too difficult to introduce. The FSB does not agree. A fuel duty stabiliser would give the UK’s five million small businesses the certainty and stability they need to factor in fuel costs to their business plans.”
If you feel your business would like expert advice on managing its finances, don’t hesitate to give us a call.