Government urged to curb fuel price

The RAC has urged the government to curb petrol prices to help beleaguered motorists after the cost of oil surged $16 to $120 a barrel.

The motoring organisation is calling for the government to use fuel duty as price stabiliser - so when petrol prices rise, the fuel duty drops in proportion.

Motoring strategist Adrian Tink said: "The government may argue that they'll lose revenue if they do this, but the increase in funds they received from VAT should be ample compensation."

The RAC would also like to see the government set fuel price limits so that motorists can be sure that prices stay consistent everywhere in the UK.

Adrian added: "The average price is around 10p higher on motorway service stations than it is in the cities, while rural communities are also hit by higher prices. This is very unfair, and we would like to see the government taking action."

Prices had surged on Monday as investors fled to oil amid unease about whether the $700 billion plan to buy bad mortgage debt will stabilise the financial system.

It will rescue financial firms from hundreds of billions of dollars of debt when housing prices began to fall in 2006.

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