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Last Updated: Saturday, 20 September, 2003, 16:03 GMT 17:03 UK
Petrol 'stealth tax' claims
Man filling car at petrol station
The annual petrol tax rise was delayed because of the Iraq war
A rise in petrol tax of over 5p a gallon could be the start of a series of tax rises, say the Conservatives.

In his Budget in April, Chancellor Gordon Brown delayed the planned rise for six months because of the "high and volatile level of oil prices" caused by the Iraq war.

The six months is up at the end of this month and, with the end of official hostilities in Iraq, the 1.28p a litre price hike could be imposed on 1 October.

Motoring organisations said the increase would not be welcomed by drivers.

Motorists would see this cost rise hit their wallets immediately
RAC

While Shadow Chancellor Michael Howard said it was "another stealth tax" aimed at cutting government debt.

"The government is continuing its path of spending and failing. Sooner or later Labour will put up taxes again," said Mr Howard.

"Despite tax rises and a worsening deficit, we are not seeing the improvements in services that were promised."

A clause in this year's Finance Act allows Mr Brown to make the levy without further approval from Parliament.

Both the AA and the RAC said a rise would penalise drivers already suffering from rising costs of running a car.

An RAC spokesman said: "Motorists would see this cost rise hit their wallets immediately.

"It is something that the motorist will not be happy with."

No decision

Meanwhile an AA spokesman added: "Mr Brown deferred this rise in the Budget because the situation in the Middle East was so volatile.

"If he puts it up now, that implies that he thinks the situation has stabilised.

"We don't think it is stable at all, it is still very volatile. We would disagree with any rise at the moment."

However, analysts said an autumn tax hike would not affect motorists too badly, as petrol prices had dropped as Iraq began to recover its production.

A Treasury spokeswoman told BBC News Online on Saturday that although a decision would be made before 1 October on the rise, it had not been taken yet.

Petrol in the UK currently costs an average of 76.2p for a litre of unleaded, with duty making up about three-quarters of the price.




WATCH AND LISTEN
The BBC's Patrick Bartlett
"Petrol companies say now is not the time to raise tax"



SEE ALSO:
Lords oppose EU fuel duty cut plan
21 May 03  |  Politics
Petrol price war at UK pumps
26 Apr 03  |  Business
Supermarkets in petrol price war
18 Apr 03  |  Business
War puts off fuel tax rises
09 Apr 03  |  Politics


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