{"id":333826,"date":"2011-03-24T03:27:02","date_gmt":"2011-03-24T03:27:02","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/03\/24\/oil-tax-wont-raise-fuel-prices\/"},"modified":"2011-03-24T03:27:02","modified_gmt":"2011-03-24T03:27:02","slug":"oil-tax-wont-raise-fuel-prices","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/03\/24\/oil-tax-wont-raise-fuel-prices\/","title":{"rendered":"Oil tax ‘won’t raise fuel prices’"},"content":{"rendered":"

\n \t\t
\n 23 March 2011<\/span>
\nLast updated at <\/span>23:27 ET<\/span>
\n<\/span><\/p>\n

The windfall tax on oil companies announced in the Budget will not be passed on to motorists in higher fuel prices, a Treasury minister has said.<\/p>\n

The chancellor announced a \u00a32bn windfall tax on North Sea oil producers, to pay for a fuel duty cut. <\/p>\n

Labour said the oil firms might recoup this through higher pump prices. <\/p>\n

But Danny Alexander said consumers would not be passed these costs because petrol retailers could source oil from whatever source was the cheapest.<\/p>\n

In Wednesday’s Budget, Chancellor George Osborne said: “The price of oil has risen 35% in just five months,” he said. “Oil companies are making unexpected profits.”<\/p>\n

Hence, he would introduce what he described as a “fair fuel stabiliser”.<\/p>\n

“From tomorrow the supplementary charge levied on oil and gas production will increase from 20% to 32%,” he said.<\/p>\n

This, he said, would raise an additional \u00a32bn ($3.3bn).<\/p>\n

“I don’t want important investment in the North Sea lost,” Mr Osborne continued.<\/p>\n

“If the oil price sustains a fall below $75 – and we will consult on the precise figure – we will reintroduce the escalator and reduce the new oil tax in proportion.”<\/p>\n

The moves by the chancellor come in response to a recent surge in global oil prices.<\/p>\n

As well as cutting fuel duty this year, he said that an inflation-linked rise in duty planned for next week would be delayed until next year.<\/p>\n

Labour’s Treasury spokeswoman Angela Eagle, speaking on BBC Two’s Newsnight programme, suggested oil companies could recoup money lost to the windfall tax by putting up prices at the pumps. <\/p>\n

But Mr Alexander, the Chief Secretary to the Treasury, said he could guarantee that would not happen. <\/p>\n

\n\tContinue reading the main story<\/a>\t\t<\/p>\n

FULL BUDGET DOCUMENTS<\/h2>\n

\t\t<\/p>\n

PDF download<\/span> Budget 2011[1.1 MB]<\/sub><\/a><\/p>\n

\t<\/p>\n

Most computers will open PDF documents automatically, but you may need Adobe Reader<\/p>\n

\t\n\t\t<\/div>\n

He said the suggestion was “complete nonsense” because the North Sea oil companies were entirely separate from those selling fuel at the pumps who have access to a competitive global oil market. <\/p>\n

“The oil market is a global market. It’s not going to feed through to the price of oil,” said Mr Alexander.<\/p>\n

He went on: “If the oil companies try to pass that on to retailers they will simply buy their fuel from elsewhere. You’ve got a global market for oil and you’ve got a competitive market for the supply of fuel, so there is no prospect of that being passed on.”<\/p>\n

The chancellor’s windfall tax plans were given a cool reception by the petrochemicals industry.<\/p>\n

“This tax hike could have a chilling impact on future investment in the North Sea,” said Mark Hanafin, managing director of Centrica Energy.<\/p>\n

“With more than 50% of Britain’s gas now imported, it is vital for our energy security and for the economy that investment is maintained to ensure we extract all of the untapped hydrocarbons we can.”<\/p>\n

Shadow chancellor Ed Balls has blamed rising VAT for high pump prices.<\/p>\n

“The idea that drivers around the country should be grateful for a 1p cut in fuel duty when George Osborne’s VAT rise is adding 3p to the price of petrol is laughable,” Mr Balls said.<\/p>\n

As reaction to the Budget continues, BBC political correspondent Carole Walker said: “Labour will keep up the pressure on the government warning of the dangers of slow growth, rising unemployment and higher than expected borrowing.” <\/p>\n<\/p><\/div>\n<\/p>\n

Link:
\nOil tax ‘won’t raise fuel prices’<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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