Motor insurance: fuel price stabiliser?

Tuesday, 18 January 2011

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Good news could arrive for motor insurance holders in the future, after the prime minister said that he was working with the Treasury on a plan to cut costs.

Speaking in Leicester, the PM said that petrol price rises had been "painful and difficult" for car insurance users.

Mr Cameron said: "We are looking at it. It's not simple, it's not an easy thing to put in place but I would like to try and find some way of, as I say, sharing the risk of higher fuel prices with the consumer."

He added that the government was looking at the possibility of introducing a "fuel price stabiliser". This would reduce fuel duty when oil prices increase, with the tax jumping when oil prices are reduced.

Mr Cameron's comments come after the price of fuel reached £1.30 a litre for unleaded petrol, due to a rise in fuel duty, combined with the VAT going up to 20 per cent.

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