Petrol VAT rise 'must be reversed'

The Tory-Lib Dem coalition must reverse its recent rise in VAT on petrol, shadow chancellor Ed Balls has said.

Speaking to the Sunday Times newspaper, Mr Balls said the reversal would cut 3p off the cost of a litre of petrol and help those in the middle of a "cost-of-living crisis".

He said: "Filling up a family car now costs £65-£75.

"World oil prices are already very high and the Chancellor has chosen, at this very moment, to raise fuel prices further by pushing up VAT.

"I am urging him to reverse that increase."

Petrol costs are rising faster than at any point in the past 10 years. Some companies are charging at least £1.40 a litre, adding to the existing expense ofcar insurance.

The uprisings in North Africa and the Middle East have caused panic in some quarters and has led to spiralling oil prices, which petrol retailers say will be passed on to motorists at the forecourts in the coming weeks.

A 1p rise in fuel duty is also planned for the end of the month.

The two factors could lead to an estimated 5p per litre increase by April 1.

Mr Balls said Chancellor George Osborne has no excuse not to ease the misery for motorists and said public anger could escalate "very quickly" if he refuses.

He continued: "Osborne will say that he can't make these sorts of decisions outside the Budget, but he recently announced a new bank tax at 7.22am on the (BBC Radio 4) Today programme. If he can have a mini-budget for banks, he can have a mini-budget for motorists."

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