High fuel prices put brake on UK’s economic growth

RECORD high fuel prices are holding back UK economic growth, according to the Road Haulage Association.

 

Britainis suffering the longest peacetime slump in a century as data from the Office for National Statistics confirmed that the economy shrank by 0.2% in the first quarter of 2012, the second consecutive fall.

 

Confirmation that theUKis suffering a ‘double-dip recession’, the Association’s chief executive Geoff Dunning said: ‘Of course we are disappointed at the news that theUKhas returned to a state of recession.

 

‘However, what comes as an even greater disappointment is that this news is not unexpected. If Government would heed our advice and address the issue of fuel duty once and for all, this is a situation that could almost certainly have been avoided.

 

‘Users of petrol and diesel fuels are desperate to see a reduction in fuel duty. The price of a tank of fuel would reduce and the subsequent savings would be put back into the economy, giving trade the boost it so desperately needs.

 

‘The barrel price of oil now stands at its lowest for quite some time. In addition, exchange rates are holding up well. Despite this, forecourt prices are still too high, with the margin on diesel having risen from 3.48p per litre in March to 7.65p per litre. This is an increase of 123% or more than the August duty rise.

 

‘This issue that will not disappear but, approaching it in common sense way will go a long way to helping increase spending and subsequently increaseGDP. We must tackle this issue head on. Only then will we see an increase inGDPin the next quarter.’

 

A 3p a litre rise in fuel duty is scheduled for August 1.

THE Office of Fair Trading (OFT) does not plan to launch a market study into UK road fuel retailing. Its decision follows a meeting with RMI Petrol, the fuel division of the Retail Motor Industry Federation, which had submitted evidence from independent forecourts to the OFT in mid-February and requested that a new market study be initiated under the Enterprise Act 2002. Brian Madderson, chairman of RMI Petrol, said: ‘We had a useful discussion with the OFT to examine their findings to date and understand better their position following the submittal of our report back in February. The OFT has invited us to provide further evidence in support of our original submission. We intend to do this in conjunction with our members and interested third parties before the OFT reaches a final view in mid-June.’


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