Tax windfall enough to cover fuel duty freeze, says IFS

Windfall gains made by the Government from taxes on North Sea oil would more than pay for a postponement of the 2p rise in fuel duty scheduled for this October.

Research exclusively conducted for The Independent by the Institute for Fiscal Studies reveals that the Government will make a gain of around £1bn in this tax year, compared with the estimates made in the Budget. That is because the Treasury bases its estimates on the average oil price forecast by independent observers, which stood at only $83.80 per barrel in March. The price of a barrel touched $135 recently, and the consensus of independent forecasts now stands at $103 for the year, with Government oil revenues rising commensurately.

In 2009-2010 the windfall gain could be even higher at £1.25bn, according to the IFS. The cost of postponing the 2p increase in fuel duty, by contrast, is about £550m. Indeed, the Chancellor, Alistair Darling, could also afford to postpone the controversial rise on vehicle excise duty for older cars, a move designed to raise an extra £465m in 2009-2010.

Carl Emmerson, the deputy director of the IFS, said: "The direct impact of higher oil prices on the profitability of North Sea oil companies would in isolation boost tax revenues by enough to delay October's planned 2p increase in fuel duty by up to a year."

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UK energy regulator plans help for fuel poor

Britain's poorest households should get more help finding the cheapest power and gas deals under a new plan to soften the blow of soaring energy prices.

UK energy regulator Ofgem published its "Fuel Poverty Action Programme" on Friday which it says aims to get consumers who pay more than a tenth of their income on heating and lighting their homes onto the cheapest tariffs available.

"We have to find ways to identify and target more effectively low income and vulnerable customers most in need of help from the government, suppliers and non-government agencies," Ofgem Chairman John Mogg said.

Under the plan, the Department of Work and Pensions will look at new laws to allow more information to be shared by government and energy suppliers to improve targeting help for poorer customers, while another government-funded scheme will ensure the most vulnerable customers are on the cheapest tariff.

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Maximize your fuel efficiency

Drive more efficiently

* Drive sensibly: avoid aggressive driving, such as speeding, rapid acceleration and braking. (5 percent to 33 percent fuel economy benefit)

* Observe the speed limit:gas mileage usually decreases rapidly at speeds above 60 mph. (7 percent to 23 percent fuel economy benefit)

* Remove excess weight: avoid keeping unnecessary items, especially heavy ones, in your vehicles (1 percent to 2 percent fuel economy benefit per 100 pounds)

* Avoid excessive idling.

* Use the cruise control.

* Use overdrive gears.

Keep your car in shape

* Keep your engine properly tuned:fix vehicles that are out of tune, have serious maintenance problems or have failed emissions tests. (4 percent fuel economy benefit)

* Check and replace air filters regularly. (up to 10 percent fuel economy benefit)

* Keep tires properly inflated. (up to 3 percent fuel economy benefit)

* Use the recommended grade of motor oil. (1 percent to 2 percent fuel economy)

Plan and combine trips

* Combine errands into one trip.

* Stagger work hours to avoid peak rush hours.

* Consider telecommuting if permitted by your employer.

* Take advantage of carpools and ride-share programs.

* Consider public transit.

* Reduce aerodynamic drag by placing items inside the trunk rather than in a roof carrier whenever possible.

Choose a more fuel efficient vehicle

Research vehicles before buying and select the most fuel efficient vehicle to meet your needs.

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MOST FUEL EFFICIENT VEHICLES

Best and Worst Fuel Economy. Find the most and least efficient 2002 model year cars and trucks.

MOST FUEL EFFICIENT VEHICLES