THE government has no current plans to slash fuel duty amid the rising cost of living and spiralling global energy prices, it has been confirmed.
Treasury Minister Susie Pinel said ministers had been considering ‘what practical steps we can take’ to help alleviate the impact of inflation, but added that the government was not ‘convinced’ that a fuel duty reduction would provide the ‘sort of targeted help that is most needed by lower-income households’.
Consumer Council chair Carl Walker recently wrote to the Chief Minister to call for a reduction in the duty on motor fuel by 9p per litre at the till, a figure which he said would comprise the recent 5p duty rise and 4p environmental levy introduced to fund action to tackle climate change.
UK Chancellor Rishi Sunak recently reduced fuel duty by 5p a litre, which prompted a question from Deputy Steve Ahier during yesterday’s States sitting about whether a similar reduction in Jersey was being considered ‘to alleviate the growing energy crisis which is affecting so many Islanders’.
In response, Deputy Pinel said reducing fuel duty would ‘not benefit all households equally’ and would disproportionately help higher earners.
‘We are looking at how we can do it and where it would be most effective,’ she told the Chamber.
The minister said she had attended a meeting on inflation earlier this week and had learned that a reduction of 1p in fuel duty would equate to a loss of £425,000 for the Treasury Department.
Reducing fuel duty would result in a ‘reduction into the exchequer, which then funds the lower income households’, Deputy Pinel said.
Deputy Montfort Tadier said the government had received an ‘unexpected windfall’ in fuel duties, and questioned whether the money should be used for some wider benefit.
In his letter to the government, Mr Walker said that the amount of duty taken by the government had increased significantly, creating ‘a comfortable buffer’ to enable it to absorb the proposed temporary duty drop.
Deputy Steve Luce and Constable Mike Jackson raised concerns over the impact of rising fuel costs on the fishing industry, which they said did not receive subsidies like their French counterparts did, meaning they were paying far more to fish in the same waters.
But Deputy Pinel said the government could not aim support at one industry.
