Page last updated at 09:54 GMT, Wednesday, 1 April 2009 10:54 UK

Petrol tax rise comes into force

Petrol pump
One group condemned the rise as 'madness' in the current economy

Motorists are now paying an extra 2.12p per litre of petrol as a government fuel tax increase comes into force.

The AA, which opposed the rise, said for a family with two cars, each using an average of 1,286 litres per year, the annual tax increase will be £54.53.

The Freight Transport Association (FTA) said the rise could "push businesses over the edge".

Last year, fuel prices were at record levels, encouraging the government to delay the plans to increase duty.

The FTA said there could be further fuel tax increases this year announced in the Budget on 22 April and a rise in truck firms going out of business.

'Death warrants'

AA president Edmund King said: "These April fuel increases are no joke. It's a shame that this and other fuel tax increases will severely dent consumer spending and undermine the UK's economic recovery.

"Taking an extra £1 off drivers each time they fill up their fuel tank is a £1 taken away from High Street and leisure spending that would help revive the economy."


FTA chief executive Theo de Pencier said: "The government has another bite of the cherry on 22 April. If they take that bite, they are as good as signing the death warrants for some businesses and putting yet more workers onto the dole queue.

"At a time when jobless figures are already sky-rocketing, the government needs to understand that such actions will only add to them."

Corin Taylor, senior policy adviser at the Institute of Directors, said: "It is true that petrol and diesel prices have fallen from last year's highs, but this tax rise will make life harder for the thousands of ordinary businesses struggling in the recession, and will only add to crippling job losses.

"It is madness to be piling extra costs on firms in the middle of an economic crisis. Any further increases in fuel duty must be put on hold."

But the government has been defending the tax rise. A Treasury spokesperson said: "Oil prices are far lower now compared to the peaks seen last year, and we have seen significant reductions in the price of fuel at the pumps over recent months.

"November's Pre-Budget Report set out changes to fuel duty in line with the government's long-term policy of reducing emissions and financing world-class public services, and in real terms, fuel duty in the UK still remains lower today than it was a decade ago."

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