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Friday, 15 September, 2000, 00:48 GMT 01:48 UK
Government tax claims "spurious"
protesters
Hauliers are paying increasing amounts to the Treasury, Opal says
A leading oil consultant has condemned as "completely spurious" government claims that tax takings from petrol pump sales have fallen.

Peter Regnier, director of research firm Opal, told BBC News Online that increases in Treasury dues are responsible for most of the rise in pump prices since Labour came to power three years ago.

Stephen Byers, the UK Trade and Industry Secretary, has said that the proportion of forecourt petrol bills taken by the government in duty has fallen from 78% in May 1997 to 76% today.

While Opal confirmed the government's figures, the consultancy, which claims the Monopolies and Mergers Commission and World Bank among its clients, dismissed the data as irrelevant to the debate on the rise in fuel prices.

Higher takings

In absolute terms, Treasury takings have risen more than oil prices, said Opal, which has more than 25 years experience watching fuel markets.

EU pump prices
UK: 1,321
Sweden: 969
Denmark: 927
Italy: 912
Netherlands: 903
France: 884
Spain: 716
Portugal: 623

Figures: euros per 1,000 litres of diesel

"What Byers said is completely spurious," Mr Regnier told BBC News Online. "About 71% of the increase in petrol prices since 1997 is accounted for by higher Treasury takings."

Of the 21p rise in petrol prices over the last three years, 12p is accounted for by fuel duty, 3p by VAT and 6p by higher fuel prices, Mr Regnier said.

While pump prices in the UK are higher than those in most European countries, wholesale petrol prices are the EU's lowest, he said. Only in Portugal are wholesale diesel prices lower.

Supermarket competition

"Certainly prices are higher than they were. But competition with supermarkets has kept them down."

Prices before tax
Sweden: 427
Belgium: 419
Netherlands: 417
Austria: 398
Denmark: 397
France: 347
UK: 331
Portugal: 287

Figures: euros per 1,000 litres of diesel

It as little surprising that UK hauliers, competing against foreign rivals who could survive for days in Britain on fuel bought at Continental prices, were complaining.

"The government could reduce prices by quite a lot and still be above the rest of Europe," Mr Regnier said. "Our chaps have got grounds to say they cannot compete."

Mr Regnier's comments were echoed by the Freight Transport Association, which represents hauliers and freight users.

"Pretty tenuous"

Mr Byers' argument over falling Treasury takings is "pretty tenuous", said FTA economist Simon Chapman.


The government's greed has been keeping pace with Opec's greed

Simon Chapman, economist, Freight Transport Association

"The government's greed has been keeping pace with Opec's greed," he said.

He blamed the UK's high prices on the fuel duty escalator, which the Conservative government introduced in 1993 as an alternative to a green tax being proposed by the European Commission.

While the EC dropped plans for a carbon tax, the UK was left with a mechanism which has raised prices to levels well above the rest of Europe.

Motorist friendly

Mr Byers told BBC Radio 4's Today programme on Monday: "The actual percentage of tax being paid in petrol today is lower than it was when we took office in May 1997.

"That is one of the reasons why the Daily Telegraph, not a great supporter of the government said after the last Budget that it was the most motorist friendly Budget in eight years."

"A year ago crude was selling at 10 a barrel. It is now over 30 a barrel. That's the real reason why prices have gone up."

Higher fuel duty was offset by lower taxes elsewhere, he said.

 WATCH/LISTEN
 ON THIS STORY
Stephen Byers, Trade & Industry Secretary
"The percentage of tax is lower today than it was when we took office"

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14 Sep 00 | Business
14 Sep 00 | Business
14 Sep 00 | Business
12 Sep 00 | Business
12 Sep 00 | UK Politics
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