Warnings that period of lower fuel costs are under threat

Fuel and insurance two likely targets that will hit motorists in this weeks budget

AT THE VERY time fuel prices are beginning to rise at Moray petrol stations the UK Chancellor seems set to pile on further misery for motorists this week.

Both insurance premium tax and fuel duty are being touted as likely targets for George Osborne when he announces his latest budget measures on Wednesday.

Just a year after placing a 3.5% increase on insurance premiums motoring industry experts believe that a further hike is set to be applied – and while fuel duty has been spared in recent budgets that, again, is an area that is likely to be brought into his sights.

“Now is the wrong time for a hike in fuel duty,” Moray’s MP Angus Robertson commented on the expectations reported by motoring organisations the AA and RAC.

He added: “After six years of George Osborne’s failed stewardship the UK economy continues to be in a precarious position and such a move would damage economic recovery.

“Raising the price of petrol and diesel now would be bad for areas like Moray and bad for the economy as a whole – we need support for households and for businesses.

“A raid on fuel duty by the Chancellor would squeeze the pockets of families, those in rural communities that depend on a car, and raise costs for small businesses – it would put at risk crucial economic growth and job creation.”

It is a view widely shared by such as the President of the AA, Edmund King, who pointed to the damage Insurance Premium Tax did to his organisation and the industry as a whole: “Any additional increase in IPT would simply discourage motorists from taking out any roadside assistance cover, exposing them to potentially crippling costs for emergency recovery in the event of a breakdown.

“The IPT hike from the last budget is a double-whammy that only affects drivers as it hits insurance and roadside assistance costs, particularly hurting those on low incomes; and young drivers, who pay the highest premiums.”

A fuel duty increase of 2p a litre is widely tipped, despite figures that show the Government already rake in 74% of the price paid at the pump.

RAC foundation director Steve Gooding said: “It is true motorists have benefited recently from falling oil prices, but the biggest driver of what we pay at the pumps is not OPEC or the big oil companies but the Chancellor.

“In the unlikely event fuel retailers wanted to give petrol and diesel away for free, they couldn’t. Motorists would still pay 69.5p a litre on the forecourts: 57.95p in fuel duty and 11.6p in VAT.

“With the price of oil forecast to stay low, the Chancellor might now be tempted to look at increasing fuel duty. We hope he does not.”