HC Deb 26 February 2001 vol 363 cc510-2W
Dr. Cable

To ask the Chancellor of the Exchequer what steps he has taken since the March 2000 Budget to monitor changes in use of ultra-low sulphur petrol. [150113]

Mr. Timms

[holding answer 13 February 2001]: The Treasury does not monitor changes in the usage of individual road fuels. However, figures are produced each month showing deliveries from refineries. The most recent figures for mid-January 2001 indicate that ultra-low sulphur petrol accounted for 47.8 per cent. of all petrol released in the UK.

Dr. Cable

To ask the Chancellor of the Exchequer what representations oil refineries have made to him to have defrayed the additional production costs of low sulphur petrol; and what response he gave them. [150228]

Mr. Timms

[holding answer 13 February 2001]: The Government receive a wide range of representations in the run-up to each Budget. These include representations from oil producers. All such representations were taken account of before announcing in Budget 2000 a 1p per litre reduction in the duty rate for ultra-low sulphur petrol.

Mr. Russell Brown

To ask the Chancellor of the Exchequer what progress is being made on the introduction of ultra-low sulphur petrol in the United Kingdom [151634]

Mr. Timms

The Chancellor of the Exchequer announced in the pre-Budget report in November that the Government would reduce duty on ultra-low sulphur petrol (ULSP) on Budget day this year, in recognition of its environmental benefits, subject to consultation and it being widely available.

The Minister for Transport and I met the major oil companies on 21 February to discuss this issue. On the basis of that meeting, I am glad to say that we believe that the oil companies are on track to meet their target to supply ULSP nationwide at their retail sites by the end of March.

The Minister for Transport and I also met representatives of independent petrol retailers on 21 February. They operate over 5,000 retail sites across the country. Many are small businesses, often playing a vital role supplying rural and urban communities.

Although some independents are already supplying up to 50 per cent. ULSP, their representatives indicated that they anticipate that it could take independent retailers longer to complete the nationwide transition to ULSP than for the major oil companies, because of constraints on the capacity of UK oil refineries.

The independent retailers could move faster by increasing imports, but this might cause uncertainty in the wholesale and retail markets and would not necessarily be to the benefit of motorists.

The Government's objectives are to ensure that everyone should be able to share the environmental benefits of ULSP, and the benefits of the duty cut associated with it. It is in the whole country's interests that these objectives are achieved, and achieved as smoothly as possible.

Any decisions on actual duty rates will be taken and announced by the Chancellor in the Budget itself but, as a sensible measure that will be supported by independent petrol retailers to guarantee that all motorists would benefit from a cut in duty on Budget day, I can announce that the Government intend to match any reduction in duty on ULSP that is announced in the Budget with a reduction in duty on unleaded petrol for a temporary period until 14 June 2001.

This will ensure that the introduction of ULSP across the country will happen in the smoothest way, and that car drivers—especially in rural areas supplied by independent petrol retailers—will be able to benefit from any duty cut that is announced in the Budget for ULSP. We want to match nationwide availability at the major oil companies with all motorists benefiting from any duty cut at independent stations too.

In this way we best achieve our aims set out in November—first, that the long-term benefits to the environment are achieved; secondly, that motorists would be able to benefit from a cut in petrol duty on Budget day; and thirdly, that the benefit would go to all motorists in all areas.