Earlier today the Shadow Chancellor, George Osborne, unveiled a radical new plan to soften the impact of future fuel price rises on families. Put simply, his 'Fair Fuel Stabiliser' would reduce duty when fuel prices go up, and raise it when fuel prices go down.
To give people some perspective as to its potential impact, if a Fair Fuel Stabiliser had been introduced at the 2008 Budget fuel would now be 5p per litre cheaper, shaving £3.50 off a tank of fuel for a Ford Mondeo. If, however, instead of rising, oil prices had fallen below the $84 forecast in the Budget fuel duty would have risen to ensure the government received its revenues forecast from fuel.
In essence George is proposing a mechanism that ensures government does not profiteer from rising oil prices but which guarantees them their revenues from fuel will remain unchanged regardless of the cost of the crude material. George described his stabiliser as, "A common sense plan to help families, bring stability to the public finances and help the environment by making the price of carbon less volatile", and I agree!