Government proposes measures to control fuel prices

By Matt Gibson

Motorists already feeling the pain of pricey car insurance premiums and this week's 2.5 per cent rise in VAT could benefit from a potential Government policy linking fuel tax to oil prices.

Prime Minister David Cameron said the Treasury was considering the viability of a fuel stabiliser that would see drivers pay less tax when oil prices rise and more tax when prices fall.

The policy was outlined in the Conservative manifesto last year but failed to make an appearance in the coalition agreement with the Lib Dems.

Mr Cameron said: "I think we also need to ask ourselves this question, and I am working with the Treasury on this.

"Is there a way in which when the oil price goes up, if the Treasury is getting more revenue out of that oil, can we find a way of sharing that risk with the consumer? i.e. if the price goes up, the tax comes down, and if the price goes down, the tax goes up."