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Wednesday, 8 August, 2001, 10:19 GMT 11:19 UK
Treasury considers oil windfall tax
Petrol pumps
The Treasury says it would consider a windfall tax
The UK government would not rule out a windfall tax on the profits of oil companies if petrol tax cuts for motorists are not passed on.

"The Chancellor would want the duty cuts in the last budget to be passed on to consumers," a Treasury spokesman told BBC News Online.

"Anyone can make representations (about windfall taxes) at anytime before a budget and they will be considered. Taxes are a matter for the budget and we would not rule out any measures," the Treasury spokesman said.

But he stress that there was "nothing new" and that "nothing had changed" in the Treasury's position.

Oil companies like Shell and BP in the past week have again reported near record profits for the second quarter of 2001.

High fuel costs

Oil companies say much of the cost of fuel in Britain, which has angered motorists who pay the highest prices in Europe, is due to taxes and duties.

Last September a fuel blockade by truckers brought the country to a near standstill when the protesters picketed refineries.

In March budget, Chancellor Gordon Brown announced a two pence cut on excise duty for petrol and a three pence cut for diesel.

The next possible opportunity that Mr Brown would have to introduce any windfall tax would be the March 2002 budget.

The last time the government levied a windfall tax was in 1997 when privatised utilities were landed with a 5b tax bill on the "excessive" profits they had made.

See also:

02 Aug 01 | Business
Shell profits continue to gush
07 Aug 01 | Business
BP's profits fall from record high
08 May 01 | Business
Oil firms: Excessive profits?
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