THE government should suspend its environmental tax on road fuel during a surge in prices which could push costs at the pumps to the highest point in living memory, the head of Jersey’s Consumer Council has said.
Carl Walker made the comments after petrol and diesel started hitting around £1.50 per litre at some filling stations at a time when the rise in the general cost of living was heaping financial strain on many Islanders.
In recent weeks and months the rate of inflation has risen to 3.8% – its highest level since 2018 – with the price of gas increasing by 13%, electricity by 4% and water by 3.5%.
The already-inflated cost of food is set to increase even further, with the boss of Tesco this week warning that ‘the worst is yet to come’.
Today, Mr Walker said that the government could help struggling households by temporarily suspending the 4p-per-litre environmental levy. The charge was approved by the States in 2019, shortly after Members declared a climate emergency, with revenue going into a fund dedicated to addressing global warming.
In the UK, the wholesale cost of petrol and diesel took a slight dip in December before rising again. But Mr Walker said he did not think any possible price reduction was passed on here due to the nature of the Island’s supply chain.
‘In the UK, about three weeks ago, there was a slight dip in prices but it did not seem to make its way here. It looked like it was because of a dip in demand as they had a full work-from-home order – it was almost like a lockdown – due to the Omicron variant, but that drop in price was not reflected here. I know suppliers buy it in advance and have to ship it in, so it does take a bit of time for those price changes to filter through,’ he said.
In April 2020, at the height of the pandemic, aircraft were grounded, ships were left tied up in port and cars were tucked away in garages as people around the world stayed at home. As a result, demand for oil virtually disappeared, pushing the global price negative for the first time ever.
Following this, the Organisation of the Petroleum Exporting Countries, Russia and other nations cut oil production in an effort to boost prices.
Despite signs that life could be returning to normal, some are suggesting that supply has not kept pace with demand – potentially contributing to the significant rise in costs.
Mr Walker said: ‘I do not recall petrol prices being as high as this, certainly not in my lifetime.
‘What we have also seen is that government fuel duty has gone up and we now have the environmental levy, which has led to a few extra pennies per litre being added on. At a time when consumers are struggling with the cost of their heating oil, electricity, food and a number of other things, could the government consider a pause to the environmental levy?
‘Yes, Jersey has declared a climate emergency and the Island must do its bit to protect the environment, but we also have a cost-of-living emergency and even the smallest change can mean the difference between someone being close to the breadline or falling over it. It is not going to make a massive difference but every little helps at the moment. This does not just affect people doing the school run, it affects the cost of delivering everything when it arrives in the Island.’
Factbox
Potential savings if the environmental levy is removed (exact fuel tank capacity may differ by model)
Ford Fiesta (45 litres) £1.68
Range Rover (86 litres) £3.44
Honda CR-V (57 litres) £2.28
Ford Transit (80 litres) £3.20
