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Last Updated: Monday, 21 January 2008, 00:35 GMT
Call for fuel tax rise to be axed
Motorist fills up his car with petrol
The increase in fuel duty could make British firms less competitive
More than 700 businesses have called on the chancellor to scrap a planned rise in fuel duty.

The increase of 2p per litre, due to take place in April, will cost the haulage industry 170m, they say.

Fuel duty went up by 2p a litre in October, and the average price of a litre of unleaded is now over 104p.

The firms said hauliers would be less competitive than European rivals. The Treasury said by 2010 duty rates will be lower in real terms than in 1999.

The planned duty rise comes as oil prices hover near $100 a barrel.

In a letter to Alistair Darling, the companies said: "We are alarmed by the signals that the government appears to be sending to such a crucial industry at a time when the economy appears to be stalling."

The British Chambers of Commerce said the government must urgently reconsider the tax.

"This is yet another tax on business which further erodes our international competitiveness," said David Frost, director general of the BCC.

A further increase in fuel duty of 1.84p is due in April 2009.

The planned fuel tax increases come after protests at refineries against fuel tax levels in 2000 left Britain struggling for petrol supplies.

The Treasury said fuel duty rates announced in the Budget for the next three years had provided "certainty" for business and sent the right environmental signals in the fight against climate change.

A spokesman said: "After these changes, by 2010 main fuel duty rates will be 11% lower in real terms than they were in 1999.

"The changes were made alongside reforms to vehicle excise duty that cut rates for less polluting vehicles and a number of measures to support hauliers which they have welcomed."

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