Britain's Brown wary of petrol duty rise

LONDON - British Chancellor of the Exchequer Gordon Brown appears set to postpone once more his planned increase in petrol duty in Thursday's pre-Budget report.

With a general election probably only six months away, Brown will be acutely wary of again raising the ire of motorists and truck drivers who brought the country to a standstill four years ago by setting up blockades to protest against high fuel prices.

Brown first announced the latest planned rise in petrol duties of nearly 2p (5c) a litre in the Budget this year for introduction in September.

But that was postponed as surging energy costs pushed up petrol prices sharply, and Brown promised to revisit the issue in the pre-Budget report, while applying pressure on leading oil producers to increase supplies.

But oil prices kept going up, hitting record highs in October before easing in the past week.

"We still take the view that although fuel prices have come off the boil from where they were in October, they're essentially just back to where they were in September," said Road Haulage Association chief executive Roger King.

"So that argument still holds good and he should continue to suspend fuel duty increases. In fact, he should do better than that and withdraw it altogether."

Average pump prices are around 84p ($2.23) a litre, not far off the level that prompted the 2000 protests.

They have even crossed the one pound mark in some remote parts of Scotland.

"If the Government were to raise fuel duty now, it would risk a re-run of the disruption that was caused by the petrol price protest 2000," said Adam Law, an economist at Barclays Capital.

"In our view, the Government will want to avoid this, despite the cost."

- REUTERS