The decrease in oil prices could potentially lead to a fuel tax trap for road users, according to fuel and mileage specialists, The Miles Consultancy (TMC). Last week's Autumn Statement saw the Chancellor rule out any rise in fuel duty before the General Election next May.æ It's therefore expected that above-inflation tax rises will take place at some point in the second half of 2015 Oil prices fell below $75 per barrel last week, which was the benchmark that the Government set for a return to above-inflation prices when they introduced the Fuel Price Stabiliser regime in 2011. Paul Jackson, the managing director for TMC, said: 'Reviving the duty escalator would be a huge gamble by the next government. It would be a bet on oil prices staying low, thus offsetting the negative impact of higher tax on economic growth. "But global oil supply remains precarious despite the current boost given to US domestic production from fracking. Even a modest uptick in world demand for oil will quickly send the price back up again. Raising fuel duty risks hitting fleets with a double-whammy.î TMC has urged existing fleets to capitalise on the falling fuel prices by focusing on efficiency and productivity before the expected rises take place. "The reason for lower oil prices is not a glut of new crude," added Jackson. "It's because major consumers like fleets are much smarter at using in-depth information on vehicles and drivers to get the most out of every litre of business fuel.î Analysis by the Consultancy showed that, regardless of crude oil prices, the amount paid at the pump is still primarily influenced by tax decisions.æ UK pump prices only started to fall in real terms when the Government abandoned the fuel duty escalator in 2011. The FDE was introduced in 2006, and quickly pushed pump prices 25 per cent higher in real terms than levels which had sparked protests in 2000. Since the FDE was abandoned, the real price of diesel has fallen by 17%, despite oil prices remaining at all-time record highs.
