Few issues are more politically toxic for a government than rising petrol prices. It was during the fuel protests of 2000 that the then Conservative leader, William Hague, enjoyed his first and last lead in the opinion polls. At that time, the average price of a litre of unleaded petrol stood at 80p; today it stands at more than 136p – a near-record high.
Polling shows that the “cost of petrol” is among voters’ biggest concerns (just behind electricity and gas prices) and as PoliticalBetting’s Mike Smithson has noted before, there is a telling correlation between rising prices and falling support for the governing party.
George Osborne has already ruled out further cuts to fuel duty – and rightly so. The argument that any spare cash should be used to reduce tax on motorists rather than, say, limit cuts to Sure Start, is unpersuasive. But with petrol more highly taxed in Britain than in almost any other country, Tory MPs feel the government still has a case to answer. Of the current average pump price of 136.09p a litre, 58.95p is fuel duty and 22.68p is VAT – a de facto tax rate of 149.9 per cent.