Prime Minister David Cameron is insisting that he wants the ‘fuel stabiliser’ principle to be part of the budget in March.
The Treasury and some of his Lib-Dem coalition partners are, by contrast, trying to come up with ways of stopping it happening.
The principle is a good one. Unexpected rises in oil prices mean an unexpected fuel tax windfall for Government coffers. The stabiliser would mean that fuel duty could be reduced as oil prices rise, so that the Treasury doesn’t suddenly make a windfall gain over and above its expected income.
As Cameron says, that increase in fuel duty should be at least shared between the Treasury and motorist.
According to Government statistics, the Treasury pocketed an incredible £26bn in fuel duty during 2009 and £3.9bn from the VAT on the duty. (The VAT on fuel duty does, I think, break a UK taxation rule that tax is never levied on tax).
And that’s the core of the problem. Not only do most motorists know that upwards of 60 per cent of the cost of a fill-up goes straight into the Treasury, but that they are facing another pre-planned rise in fuel duty from April.