U.K. Conservative Party Leader Michael Howard encouraged motorists to protest rising fuel prices and Prime Minister Tony Blair’s plan to boost taxes on gasoline.
“People might be very angry indeed if the government were to proceed with an increase at this time,” Howard said in an interview on British Broadcasting Corp. radio. “It will cause great hardship.”
Chancellor of the Exchequer Gordon Brown plans to increase duties on gasoline by 1.98 pence a liter in September. Crude oil futures closed at a record $42.33 a barrel in New York yesterday, up 35 percent so far this year, pushing up the cost of fuel at the pump.
Howard’s comments raise the chances of a repeat of protests in 2000, when motorists blockaded oil refineries and fuel depots, cutting off supplies to the nation. British motorists paid 76.4 pence ($1.38) a liter for fuel in April, the most in the Group of Seven industrial nations and almost triple the price for U.S. motorists. In some places in the U.K., gasoline now costs more than 1 pound a liter or 4.55 pounds a gallon ($8.40).
“It is the height of irresponsibility for the leader of the Conservative Party to encourage fuel protests,” said Edward Davey, a member of parliament from the opposition Liberal Democratic Party. “During the last fuel protests millions of people had their lives disrupted and thousands of businesses lost millions.”
Motorists and lobby groups including the Road Haulage Association, which represents truckers, and the Freight Transport Association have called on Brown to back off his tax increases. The RHA said there’s a risk of protests like the ones in 2000 if prices keep rising.
Yesterday in Brussels, European Union finance ministers agreed to coordinate their response to higher oil prices. That suggests Brown won’t move to scrap his tax increase unless other nations do so as well.
Brown also is prevented from announcing any major policy decisions as ministers campaign for elections due on June 10, when voters will pick members of the European Parliament and some local government leaders. The Treasury’s response to higher oil prices has been to call on ministers from the Organization of Petroleum Exporting Countries to pump more oil.
“The impact of high prices at the pump and high oil prices represent a real and emerging risk to the global economy,” the Treasury said in a statement. “They’re a burden on motorists, industry, households, the airlines, the train companies and every other user of oil.”
Higher oil supply may not do much to dent the price motorists pay at the pump. About three quarters of the price of gasoline in the U.K. goes to pay tax.
The $1.38 a-liter cost of gasoline in the U.K. compares with 47.3 cents in the U.S., $1.05 in Japan, $1.26 in France and $1.36 in Germany, according to the International Energy Agency.
“The British government is taking action to put pressure on OPEC,” said Douglas Alexander, a member of parliament from the ruling Labour Party and a political ally of Brown. “He is putting pressure on them to put pressure on the international oil price.”