Oil firms 'can still hike prices'

Chancellor George Osborne has said he cannot stop oil firms hiking fuel prices even though he announced a duty cut in the Budget.

Mr Osborne said the Government will watch to ensure motorists benefit from the cut of 1p a litre off fuel duty, an assurance which will be a relief for drivers planning their road budgets to allow forcar insurance. The Chancellor also brought in a Fair Fuel Stabiliser, paid for by £2 billion of new taxes on the windfall profits of oil companies due to record global prices.

When asked on ITV's Daybreak whether there was a mechanism to prevent the companies raising prices, Mr Osborne said: "I'm not in control of the world's oil price unfortunately.

"What I am in control of are the taxes that go on to oil in Britain, in other words the duty that gets levied at the petrol station."

He continued: "I'm not pretending that this is going to transform the situation overnight for families who are feeling the squeeze, but it helps."

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