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EMERGENCY BUDGET 2010: Chancellor to investigate fuel price stabiliser

Date: 22 June 2010   |   Author: Tristan Young

The Chancellor is looking at a way to stabilise fuel prices, possibly before the end of the year.

While fuel prices will not change as a result of the Emergency Budget, tucked into one line of today's the Budget was the announcement that the Chancellor will look ways of stopping rapid changes in fuel pump prices.

"We are examining the impact of sharp fluctuations in the price of oil on the public finances, to see if pump prices can be stabilised," said Osborne.

Commenting on the possibility of a fuel stabiliser, Arval's head of market insight and BusinessCar blogger, Mike Waters, said: "Anything that helps the certainty of business costs has to be welcomed and duty is by far the largest proportion of fuel prices."

The full Budget document expanded only fractionally on this, and said: "The Chancellor has asked the Office for Budget Responsibility to undertake an assessment over the summer of the effect of oil price fluctuations on the public finances. Informed by this assessment, the Government will examine options for the design of a fair fuel stabiliser."

According to BusinessCar's sources one possible option for a fuel stabiliser was discussed by the Conservatives before the general election. This would be a duty balancer that decreased the level of tax on fuel should pump prices suddenly rocket.

However, this could end up being too complicated to work.

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