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Boris Johnson is declaring war on petrol stations that fail to pass on the Government’s fuel duty cut, pledging to name and shame those that refuse to drop their prices.
Three government sources said the Prime Minister had expressed fury that the 5p-a-litre cut to fuel duty announced in March was failing to materialise at many pumps.
On Mr Johnson’s orders, Department for Transport officials have been tasked with drawing up proposals to “expose” those failing to pass on the cut. Grant Shapps, the Transport Secretary, has suggested a government-run “forecourt watch” or “pump watch” scheme to name and shame offending firms.
A Downing Street source said: “Officials are considering mechanisms available to expose those companies that aren’t passing on tax benefits to consumers.”
The move comes as the Prime Minister faces growing Tory pressure over his leadership, with a growing number of MPs submitting letters of no confidence in Mr Johnson, and three ministers publicly criticising Downing Street over the partygate scandal.
Penny Mordaunt, the trade minister, told constituents that the rule-breaking exposed by Sue Gray’s report was “shameful”.
Ms Mordaunt said she was “angry” at those in Downing Street who were ignoring Covid rules while blocking “reasonable requests to relax restrictions” during the pandemic.
John Glen, a Treasury minister, said Mr Johnson was now in “yellow card territory”, and George Freeman, the science minister, said: “The report makes clear this is a deeper problem in the culture of No 10 ... to repair damaged public trust, serious changes now need to be made.”
'We want to nudge the market'
Mr Johnson’s war on petrol retailers follows the announcement of a windfall tax on oil and gas firms last week. The RAC has said that retailers are “taking on average 2p a litre more” than they were before the 5p cut.
Last week, senior ministers discussed the idea of imposing a similar tax on petrol firms.
During a Cabinet telephone call, Nadhim Zahawi, the Education Secretary, pointed out that gross profits from fuel sales reported by EG Group, the forecourt giant, increased by 16 per cent in the first quarter of the year.
But a government source said No 10 and ministers had settled on pursuing a less “interventionist” measure.
“We want to nudge the market. We’re not about to intervene in it,” the source said.
A Downing Street source added: “We are not looking at another tax.”
A Cabinet minister said: “It’s not up to the Government how much profit business makes. But when we deliver a 5p cut in duty you expect good capitalists to pass it on.”
The Competition and Markets Authority is “closely monitoring the situation”.
Writing in this newspaper, David Davis, the former Cabinet minister who warned on Saturday that Tory MPs “see their own seats disappearing”, said: “What the Government should not be doing now is overtaxing us and then handing us back our own cash like pocket money. It should be taking every opportunity to cut or cancel taxes.”
In a separate article, Robert Jenrick, the former housing secretary, said it was “difficult to explain what differentiates us from our opponents”.
The Petrol Retailers Association said: “We agree on the need for the fuel duty cut to be passed on, and that our members have done so.”
Meanwhile, 11 prominent firms and industry groups have warned Mr Sunak that proposals for an online sales levy amount to a “shopping tax” that would deepen the cost of living crisis.