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Fuel duty review 'needed' as Russia's war sets prices soaring

Fuel duty review 'needed' as Russia's war sets prices soaring

Thursday 10 March 2022

Fuel duty review 'needed' as Russia's war sets prices soaring

Thursday 10 March 2022


The Government needs to review its 5p-a-litre fuel duty increase in light of Russia's invasion of Ukraine pushing up prices at the pump, a fuel distributor has said.

Jon Best, Chief Operating Officer of ATF Fuels, said that the Government needed to balance duty rises with its increased income from GST which is accompanying the current record-high fuel prices.

This week, there were warnings that prices could surge to as much as £1.75 per litre amid news from the US that a boycott of Russian energy is being considered, which pushed the price of oil to nearly $140 dollars per barrel. 

Speaking to a Scrutiny Panel of politicians, specifically about the Government’s Carbon Neutral Roadmap, which is due to be lodged for debate this week, Mr Best said: “Over the last two weeks, the international fuel markets have changed beyond recognition. 

“In my 22 years’ experience in this industry, I have never seen such a volatile market. The last time I remember seeing such market movements was the 11 September attacks in New York, when prices also significant soared overnight, but they fell back thereafter.

“As the conflict continues and sanctions are applied to Russia, I think it is likely that fuel prices will remain high and possibly go higher for a sustained period of time.

“I think it has implications on the Carbon Neutral Roadmap. Firstly, in the short-term, the Government are likely to see an increase in its GST returns from fuel sales, because of the price of the fuel. These are increases that it can’t have budgeted for.

“I would estimate, as we speak today, there is an additional 2.5p per litre sold received by Government compared to 12 months ago.”

Biofuel.jpg

Pictured: Mr Best said that ATF Fuels are the only distributor to sell 100% first-generation biofuels in the island.

He added: “During that time, fuel duty has increased by 5p a litre - 3p of that allocated to strategies for the Climate Emergency Fund

“Therefore, with the cost of living pressures affecting most people, we think the Government can provide some form of assistance at this time to the public of Jersey by a balancing out of those two functions.”

Mr Best added that the Government needed to act further.

“What we are seeing in Russia and Ukraine means that we need to ensure, as an island, that we have a more diverse range of supply to provide more security.

“It also means that we need to do everything we can to support a transition to more renewable forms of transport fuels and, ultimately, while we are going through that transition, supporting the push towards electrification. 

“Finally, contained within the Carbon Neutral Roadmap, the officers have made assumptions for fuel prices and those may need to be reconsidered in the light of the ever-changing environment that we are now experiencing.”  

Concerning the Carbon Neutral Roadmap, which sets out how this and future governments can meet a target of net-zero-carbon emissions by 2050, Mr Best said that, while the draft document made provisions to subsidise 100% vegetable-based ‘second-generation’ biofuels, it was wrong to omit ‘first-generation biofuels’, which contain a percentage of renewable ingredients.

AFT, he said, were the only supplier in Jersey to sell only biofuels on its forecourts and to its commercial customers, which include LibertyBus and Ferryspeed.

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Pictured: ATF's COO said the distributor supplies biofuel to LibertyBus.

“As the UK, the US, Australia and EU countries have done, Jersey should mandate the use of biofuels, such as the ones that we supply. If you were to do that, we estimate that would equate to nearly 7,000 cars taken off the road in Jersey," he said.

“I believe that would be around 10% of all Jersey motor vehicles you could impact immediately. If you look at the Government-commissioned report that has informed the Carbon Neutral Roadmap, the biofuels that are around today are mentioned as being able to provide immediate change. However, they are not mentioned in the roadmap.”

Mr Best added that he had reservations about the Government’s plan to ban the registration of all new petrol and diesel cars by 2030, as he doubted the on-street charging infrastructure would be in place within eight years. 

READ MORE...

Ukraine war to hit Jersey in the shops and at the pumps

INSIGHT: How will Jersey fuel its future?

Electric car and heating subsidies on road to carbon neutrality

Carbon neutrality going "too fast"? Too slow, says Jersey Electricity

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