The Forum of Private Business (FPB) has called on the planned increase in fuel duty to be scrapped.

Following last month’s Budget, fuel duty rose by 1 pence and two further increases – 1 pence in October and 0.76 pence next January – are planned.

The lobby group said that despite Alistair Darling’s decision to stagger the increases, the cost increases are “unsustainable” for small businesses.
 
The average price of fuel has now reached 119.9 pence per litre, topping the previous high of 119.7 pence reached two years ago, driven by a weak pound making imported fuel more expensive, the rising wholesale cost of refined fuel and higher taxes.
 
The lobby group said that increases in VAT and fuel duty between December 2008 and April 2010 have boosted the Government’s fuel tax take by 12.5%.
 
FPB policy representative Matt Goodman said: “High fuel costs affect the entire economy. When prices at the pumps go up, nearly every business and consumer in the UK suffers. It’s probably no coincidence that the previous record high prices in the summer of 2008 were soon followed by full-blown recession.
 
“The only organisations that benefit, it would appear, are multinational oil companies and the Treasury. Spiralling fuel duty is jeopardising small business growth and the planned increases should be shelved.”
 
In a survey conducted by the group following the Budget, 35% of respondents said the planned increases in National Insurance and fuel duty would hit their profitability.
 
The FPB’s calls for the fuel duty increases to be scrapped coincided with its announcement that it has struck a deal with fuel card reseller The FuelCard company “to help small businesses reduce their fuel costs”.

© Crimson Business Ltd. 2010