Rural garage sells VAT-free fuel

Motorists filling up their cars in a rural part of Suffolk would have had a welcome surprise if they were lucky enough to come across a petrol station offering VAT free fuel on Monday.

In protest at Alistair Darling's decision to cancel out the 2.5% cut in VAT with a 2p rise in fuel duty, the Jet service station in Darsham sold petrol at 79.9p and diesel for 93.9p a litre.

Chris Woodruff, who runs the garage, believes that by slashing the cost of petrol and diesel by 15% his prices are the lowest in the UK.

"We wanted to highlight the amount of money the Government is getting in taxes," said Mr Woodruff, 35.

"Duty probably amounts to 60 or 70% of the raw pump price, then you've got VAT. It's a double tax. Our profit margin is about 2.5p per litre and we're basically paying the VAT on the customers' fuel.

"We're practically giving it away. It will probably cost us about £1,000 in lost profits but we wanted to make a point."

From December 1, motorists are paying an extra 2p per litre in fuel duty - effectively wiping out a 2.5% cut in VAT, from 17.5% to 15%, announced by the Chancellor.

"In rural Suffolk, we don't have a network of public transport so whenever the Government puts up fuel duty it hits hard," said Mr Woodruff.

He estimated his forecourt was "four times busier than usual" as people queued to take advantage of the cut-price fuel.

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