European fleet and fuel management company Arval PHH, which also operates the Al ...

European fleet and fuel management company Arval PHH, which also operates the AllStar fuel card, has urged the UK Government to ‘reconsider its fuel taxation policy’ following the European Commission’s call for harmonised petrol and diesel taxes (from the EC White Paper published on 12 September 2001). The company believes that ‘British firms are competing at a disadvantage in comparison with businesses in other members states because pump prices are so high.’ ‘It is proving increasingly difficult for the government to justify the current high taxation levels when the economy is struggling and alternative forms of transport are inadequate,’ states Martin Hender, Arval PHH Director of Fuel. ‘Petrol prices have fallen recently by around 2 p/l, but this was the result of fluctuations on the international oil market and there’s no guarantee that this downward trend will continue. The threat of recession means that businesses need all the help they can get to remain competitive and the government should use this opportunity to review their fuel taxation levels as a matter of some urgency.’ Currently, for every £1 a British driver spends on unleaded fuel, 75 pence goes to the UK Government in tax and 23 pence goes to the oil company, with the retailer receiving the remaining 2 pence. This compares to an average tax rate across the other 14 EU countries of 63%, states Arval PHH. Hender also warned that moving towards European fuel harmonisation ‘will prove unpopular in other countries,’ such as Greece and Spain who levy low fuel duties and are likely to resist plans to raise their tax levels closer to those in the UK. Commenting on the potential impact on the UK oil and gas industry of the recent terrorist attacks in the US, Hender stated: ‘The price of crude oil is particularly susceptible to speculation following a Middle-East related crisis. That was a major factor in the recent leap in prices, although forecourt petrol prices remain fairly steady at the moment [mid-September]. That aside, we will have to wait and see what the long-term effects are for the price of crude. The current weakness of the dollar actually helps the UK as we buy oil in dollars. However, if the current crisis continues, and the price of oil stays high, we could see the effects filtering through to what we pay at the pumps.’