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Danny Alexander calls for fuel price cut Danny Alexander to call for fuel price cut
(about 1 hour later)
Major petrol and diesel distributors are to be called on by Chief Secretary to the Treasury Danny Alexander to drop their prices further in light of recent declines in the cost of oil.Major petrol and diesel distributors are to be called on by Chief Secretary to the Treasury Danny Alexander to drop their prices further in light of recent declines in the cost of oil.
Oil has fallen from about $115 (£72) per barrel in June to about $84 per barrel, a decline of about a quarter.Oil has fallen from about $115 (£72) per barrel in June to about $84 per barrel, a decline of about a quarter.
In comparison, petrol prices in the UK have come down from a high of about 131.7 pence per litre in the summer to 124.22 pence.In comparison, petrol prices in the UK have come down from a high of about 131.7 pence per litre in the summer to 124.22 pence.
That is a decline of about 6%.That is a decline of about 6%.
For diesel the drop is from 136.37 pence per litre to 128.58 pence.For diesel the drop is from 136.37 pence per litre to 128.58 pence.
"I believe it's called the Rocket and Feather effect," he will say, in prepared remarks seen by the BBC for a speech to the Highlands & Islands Branch of The Energy Institute in Aberdeen."I believe it's called the Rocket and Feather effect," he will say, in prepared remarks seen by the BBC for a speech to the Highlands & Islands Branch of The Energy Institute in Aberdeen.
"The public have a suspicion that when the price of oil rises, pump prices go up like a rocket. But when the price of oil falls, pump prices drift down like a feather.""The public have a suspicion that when the price of oil rises, pump prices go up like a rocket. But when the price of oil falls, pump prices drift down like a feather."
While no research supports this, the thought of this effect creates ill feeling, he will say.While no research supports this, the thought of this effect creates ill feeling, he will say.
During the period, the pound has weakened against the dollar. Whereas a pound bought $1.7165 at its height in the summer, it now buys $1.598 - a drop of 6.9%During the period, the pound has weakened against the dollar. Whereas a pound bought $1.7165 at its height in the summer, it now buys $1.598 - a drop of 6.9%
Because oil is traded in dollars, the weaker pound has reduced the effect of the drop in oil for UK consumers.Because oil is traded in dollars, the weaker pound has reduced the effect of the drop in oil for UK consumers.
Out of the 124.22 pence average paid for a litre of petrol, about 65% of the price is accounted for by tax, according to analysis by the AA.Out of the 124.22 pence average paid for a litre of petrol, about 65% of the price is accounted for by tax, according to analysis by the AA.
As well as being charged Value Added Tax (VAT) at 20%, 57.95 pence per litre is charged in fuel duty.As well as being charged Value Added Tax (VAT) at 20%, 57.95 pence per litre is charged in fuel duty.
In September, three major UK supermarkets said they would cut the prices of petrol and diesel.In September, three major UK supermarkets said they would cut the prices of petrol and diesel.
Sainsbury's and Tesco both announced a drop of up to five pence per litre, while Asda said it would reduce petrol by up to one penny and diesel by two.Sainsbury's and Tesco both announced a drop of up to five pence per litre, while Asda said it would reduce petrol by up to one penny and diesel by two.
The motoring organisations AA and the RAC welcomed the move.The motoring organisations AA and the RAC welcomed the move.
However the group representing independent fuel retailers said the announcements would further endanger local petrol stations.However the group representing independent fuel retailers said the announcements would further endanger local petrol stations.