UK Fuel Prices Cheapest in Europe Before Taxes

Fuel prices in the UK would be the cheapest in western Europe if it wasn't for taxes piled on top by the government, according to official figures revealed by UK Business Secretary John Hutton.

The report, published last month, shows that Britain has the cheapest diesel in western Europe once taxes are excluded, with unleaded petrol being the second cheapest.

The revelations have undermined the government's bid to dodge growing demands for action to alleviate excessive fuel prices by blaming the rising cost of oil.

With seventy percent of prices paid at the pump made up of fuel duty and sales tax (VAT), factors under direct control of the government could lighten considerably the growing burden facing car users and hauliers.

While fuel duty has remained frozen in recent years, the government has actually profited from extra VAT income on recently increasing prices.

Responding to growing criticism, finance minister Alistair Darling has recently signalled that a planned 2 pounds per litre rise in fuel duty due in October will be postponed.

But motorists also facing stinging road tax rises later this year remain upset that Mr Darling is not proposing to hand back at least those bonus government fuel tax profits by making duty cuts.

Hauliers have demanded as much as a 25 pounds per litre rebate, arguing that higher transport costs are contributing to other economic problems such as higher food prices.

The AA, Britain's leading motoring organisation, has also joined the fray by calling for the tax on fuel to be published at forecourts so drivers can see exactly how much is being paid to the Treasury.

That plan may receive support from fuel retailers, who themselves have been the target of criticism for rising prices even though the share of the cost of fuel they take as profit is tiny relative to the government's share.

As a new political season looms, the cost of motoring is set to remain high on the public agenda. The government's strategy to blame global factors for high prices while pocketing a massive tax take has predictably failed to deflect responsibility.

With its popularity now appearing to be in freefall, for how much longer can the government afford to delay dealing decisively with the problem of excessive fuel prices?