Whatever happened to the Fuel Price Stabiliser?
Discussion
The fair fuel stabiliser was introduced in the budget in 2011.
However, I think that virtually everyone misinterpreted what a fair fuel stabiliser would be. It was never going to fix the price of fuel at a specific price per litre.
Even in the Tory manifesto it was referred to as a fair fuel stabiliser and was only going to vary the rate of fuel duty.
http://cdn.hm-treasury.gov.uk/2011budget_complete....
However, I think that virtually everyone misinterpreted what a fair fuel stabiliser would be. It was never going to fix the price of fuel at a specific price per litre.
Even in the Tory manifesto it was referred to as a fair fuel stabiliser and was only going to vary the rate of fuel duty.
http://cdn.hm-treasury.gov.uk/2011budget_complete....
2011 Budget said:
Motoring
1.145 In recognition of high current oil prices, fuel duty will be cut by 1 penny per litre from 6pm today.
1.146 The Government will abolish the fuel duty escalator and replace it with a fair fuel stabiliser. When oil prices are high, as now, fuel duty will increase by inflation only. UK oil and gas production is more profitable at such times, so it is fair that companies should contribute more. The Supplementary Charge on oil and gas production will therefore increase to 32 per cent from midnight tonight.
1.147 the 2011-12 inflation-only increase in In addition, to ease the burden on motorists, fuel duty will be deferred to 1 January 2012. The 2012-13 increase in fuel duty will be implemented on 1 August 2012.
1.148 In future years, if the oil price falls below a set trigger price on a sustained basis, the Government will reduce the Supplementary Charge back towards 20 per cent on a staged and affordable basis while prices remain low. Fuel duty will increase by RPI plus 1 penny per litre in each such year. The Government believes that a trigger price of $75 per barrel would be appropriate, and will set a final level and mechanism after seeking the views of oil and gas companies, and motoring groups.
1.149 As the increased rate of Supplementary Charge will only apply when prices are high, the Government will restrict tax relief for decommissioning expenditure to the 20 per cent rate to avoid incentivising accelerated decommissioning. There will be no restrictions to decommissioning relief below this level over the course of this Parliament, and the Government will work with the industry with the aim of
announcing further, longer-term certainty on decommissioning at Budget 2012. Recognising the importance of continued investment in the North Sea, including in marginal gas fields, the Government will also consider with the industry the case for introducing a new category of field that would qualify for field allowance.
1.145 In recognition of high current oil prices, fuel duty will be cut by 1 penny per litre from 6pm today.
1.146 The Government will abolish the fuel duty escalator and replace it with a fair fuel stabiliser. When oil prices are high, as now, fuel duty will increase by inflation only. UK oil and gas production is more profitable at such times, so it is fair that companies should contribute more. The Supplementary Charge on oil and gas production will therefore increase to 32 per cent from midnight tonight.
1.147 the 2011-12 inflation-only increase in In addition, to ease the burden on motorists, fuel duty will be deferred to 1 January 2012. The 2012-13 increase in fuel duty will be implemented on 1 August 2012.
1.148 In future years, if the oil price falls below a set trigger price on a sustained basis, the Government will reduce the Supplementary Charge back towards 20 per cent on a staged and affordable basis while prices remain low. Fuel duty will increase by RPI plus 1 penny per litre in each such year. The Government believes that a trigger price of $75 per barrel would be appropriate, and will set a final level and mechanism after seeking the views of oil and gas companies, and motoring groups.
1.149 As the increased rate of Supplementary Charge will only apply when prices are high, the Government will restrict tax relief for decommissioning expenditure to the 20 per cent rate to avoid incentivising accelerated decommissioning. There will be no restrictions to decommissioning relief below this level over the course of this Parliament, and the Government will work with the industry with the aim of
announcing further, longer-term certainty on decommissioning at Budget 2012. Recognising the importance of continued investment in the North Sea, including in marginal gas fields, the Government will also consider with the industry the case for introducing a new category of field that would qualify for field allowance.
martin84 said:
Their original idea was to increase it every year but at a 'stable rate' which is essentially an escalator.
Whose original idea?This is effectively what we have ended up with. Fuel duty only goes up by inflation unless the price of oil plummets in which case it goes up by inflation plus 1 pence per litre.
martin84 said:
What we want is to fix a certain price and reduce the duty when oil goes up and vice versa to maintain that average price.
That is virtually word for word what was in the Tory manifesto (other than the bit about fixing a certain price). However, the Treasury couldn't come up with a way of making it work without it being ridiculously expensive to administer.ralphrj said:
That is virtually word for word what was in the Tory manifesto (other than the bit about fixing a certain price). However, the Treasury couldn't come up with a way of making it work without it being ridiculously expensive to administer.
They could have made it work if they had wanted. Maybe that clown Miliband will bring something like this out for the next election, and claim it's all his genius idea?
It genuinely worries me that Miliband the Inferior will be used to float the party through opposition - badly - and just before the next GE they'll install Miliband the Superior to 'take the reins' and lead the Labour party to success.
We're already seeing the rise of 'anti-austerity' parties in Greece and France. It's a bitter pill, but austerity is the only way back. To think otherwise is pure folly.
We're already seeing the rise of 'anti-austerity' parties in Greece and France. It's a bitter pill, but austerity is the only way back. To think otherwise is pure folly.
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