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Tories are promising to freeze fuel duties

Tories take on petrol prices

It’s been hot news that George Osborne has pledged to freeze fuel duties which is music to the ears of the commercial transport industry if it happens! Commercial fleet operators and managers have been really struggling with the rising costs of fuel, especially during a recession that has hit the industry hard.

However, it’s always important for us to say that TRACE is a really great option for any commercial fleet operator or manager looking to monitor their fuel consumption. Our system allows you to monitor and produce reporting on individual tyre history including position monitoring, make, model, serial number, tread depth and laser depth scanning with tyre pressures entered electronically. Our fleet fuel management module saves time and money by importing electronic data from both on-site control systems and charge cards. You can identify cost reductions because errors are immediately highlighted, as are strange mileages and mpgs (kpls). By monitoring costs, maintenance and repairs, as well as targeting MPG’s and providing for exception reporting and vehicle-to- vehicle comparisons, we can help you identify the most efficient vehicles, makes and models and tyres; this helps you with your green credentials and targets.

Anyway, enough about us: here is the GuardianBlog – link here and the full text below

When the chancellor George Osborne delivered his speech to the Conservative conference in Manchester, one announcement is likely to have been met with particular enthusiasm from many motorists (though maybe not the most environmentally minded): a pledge to freeze fuel duties until 2015.

We wanted to check out the data and ask some key questions here:

1. When was the last time a government made a pledge on fuel duties?
2. Can the government afford to freeze fuel duties?

Question 1: A new promise?

The short answer is no. George Osborne announced in the Budget 2012 that fuel duties would rise by 3.02 pence per litre (ppl). But by the August Statement 2012, he announced he would freeze them.

Then fuel duties were supposed to rise this month by 1.89 ppl. But they didn’t because the chancellor announced he would freeze them in the March 2013 budget.

Fuel duty at the moment is 57.95 ppl – which is where it’s been since March 2011 when it was unveiled in the Budget that it would be reduced by one pence.

Question 2: Is it a concession?

Motoring groups and backbench Conservative MPs often welcome these fuel duty freezes as a big win. Although they point to the fact that duty and VAT make up a larger proportion of the price at the pump than they used to (now 57%) – that’s only true if you go back three decades (in 1980, it was 46%). But if you look at the last ten years, the proportion of the price at the pump which is duty and VAT has actually fallen (in 1998 it was 82%).

But there’s another trend that’s important – falling petrol consumption. And it’s a trend that energy forecasters like Wood MacKenzie think will continue. Since 2000, government has seen its revenue from fuel duties on petrol fall and fall – from £13.7bn to £10.9bn last year.

If you look at the trade-off between government revenue lost and votes won, it’s not the right place to quibble over a couple of pence. It can’t afford not to freeze them.

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