This is not a happy month for motorists. With prices for petrol and diesel at record levels, it is scarcely the best time for the VAT increase and fuel duty escalator to kick in.
Such complaints are scarcely novel and the pleas to successive governments to “do something” about the price of fuel have a forlorn ring to them. In cash-strapped times, governments will not turn their back on this particular golden goose.
These latest increases alone will raise an extra £500million for the Treasury – not the sort of revenue that is likely to be discarded in the current climate. The downside for the economy is that this is half a billion less available for other spending.
One interesting development, however, is that other European countries are fast catching up on the British enthusiasm for taxing motorists at the pumps – and indeed some have overtaken us in the fast lane.
It used to be a mantra of this debate that Britain had the highest road fuel prices in Europe, perhaps the world. Not any more. According to the AA, we are still second highest in Europe for diesel prices, but there are nine nations ahead of us in terms of the cost of unleaded petrol at the pumps.
Another old chestnut, now consigned to history, was that Scotland was the only oil producer in the world not to pass on the benefits to its own people in the form of cheap road fuel. However, we won’t be hearing that one again since the only country where diesel now costs more than in the UK is oil-rich Norway.
In December, the average Scottish price for unleaded petrol and diesel was 128p and 126.7p, respectively. According to the AA, the Norwegian equivalent prices were 145p and 138p. The canny Norwegians clearly do not intend to encourage profligacy, no matter how much oil they produce.
Yet even if we are no longer the most expensive place in Europe to fill up at the pumps, this is unlikely to reduce the political pressure for action by government as the 130p a litre barrier is left behind.
Both of the coalition parties have commitments to meet in this respect, and they will not be allowed to forget them. In particular, the Tory manifesto pledge to introduce a fuel duty stabiliser which would allow fuel duty to fall when oil prices rise is already a little overdue.
It seems to me a complex mechanism to achieve a straightforward objective, which is to protect the motorist from ever-increasing prices. A much simpler way to balance the books would be to cut fuel duty, which accounts for more than 60% of the pump price, and tax the oil companies for the lost revenues.
The Liberal Democrats are certainly expected to deliver something on this issue for their traditional bases, such as the Highlands, northern isles and Aberdeenshire. But they don’t seem to have much of a clue about how to go about it.
All we have heard so far is a very vague commitment from Chief Secretary to the Treasurer Danny Alexander to ask the European Commission to consider the possibility of a derogation on tax for the Scottish islands. By definition, this would be a temporary measure and, of course, it would do nothing at all for the vast majority of rural Lib Dem voters.
My own long-standing view is that, to get anywhere on this issue in practical terms, it would be best to set a very limited objective. Frankly, while the rest of Europe is increasing taxation on road fuel under the guise of environmental necessity, there is not much chance of securing a significant decrease in the UK.
The real scandal that should be attacked is the differential between heavily-populated areas and the most peripheral ones, within Scotland and the UK as a whole. And I do mean the really peripheral places where nipping ten or twenty miles into town to fill up at the local supermarket is not an option.
The combined sales from a few hundred tiny filling stations are absolutely marginal to the oil companies. Yet the damage done to fragile local economies by having to pay maybe 20p a litre more than in the towns and cities is utterly disproportionate, and probably the most serious issue that affects these places.
From my own experience in government, I think the oil companies – who build many different factors into their pricing policy – could be prevailed upon to add “ultra-peripherality” to that list.
Their two legitimate concerns would be that tight geographic criteria must be established, and that there is transparency at every stage of the supply chain, so that they do not simply end up subsidising excess profits.
Instead of just moaning about the price of fuel, this would be an initiative that could actually achieve something for at least some of our rural communities. And that would be more than anything else has achieved in the long history of this debate, which is to attack the differential, which can be as high as 20p a litre between the “normal” price for fuel at any given time and what people have to pay in peripheral communities.
This is what really cripples fragile rural economies, where the option does not exist of nipping into town or city to take advantage of supermarket prices.