Fuel duty stabiliser can work …

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.”

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