Highway Robbery

 

Motorists across the country are feeling the pinch as fuel prices skyrocket following the war in Iran. The most recent data from the RAC shows that since the war began, average petrol prices have risen by 6.81p to 139.64p a litre. Diesel has increased by 14.81p to 157.19p, and these prices are likely to go higher. Spare a thought too for rural dwellers dependent on heating oil, who have seen their prices jump by an even higher proportion.

Some have been quick to condemn retailers for profiteering, failing to realise that over half the pump price is now made up of tax. Though much lower than on petrol or diesel, tax on kerosene for heating still makes up around 20% of the purchase price. The answer to lower prices is exactly the same today as it was two weeks ago: lower taxes and a government willing to back greater domestic energy production rather than standing in its way.

If ministers were serious about shielding motorists and households from global shocks, they would stop blocking opportunities to increase supply closer to home. Britain continues to sit on significant North Sea oil and gas reserves, yet the political appetite to expand drilling remains weak. That refusal carries a cost. More domestic production would not insulate the UK entirely from world markets, but it would strengthen energy security, reduce reliance on imports, support jobs and investment, and put downward pressure on prices over time. At the very least, it would be a more credible response than hectoring retailers for responding to the same international market forces as everyone else.

Nor has Labour offered any comfort on tax. Reeves has refused to rule out a 5p increase in fuel duty in September, while showing no appetite whatsoever for cutting the burden drivers already face. At a time when families, commuters and businesses are being hit by rising costs, that should alarm anyone who depends on their car, van or heating oil tank. When ministers take such a vast share of every litre sold, talk of standing up for motorists rings hollow unless it is matched by a willingness to reduce that burden.

The BBC ran the following headline on Friday: "petrol retailers in row with government over rip off accusations."

The market sets prices. The only rip offs involved are fuel duty and VAT.