Friends of the Earth have urged Prime Minister David Cameron to maintain his pressure on the Treasury for a fuel price stabiliser.

Mr Cameron wants to reform the tax system to incorporate a fuel price stabiliser – where the rate of duty is cut as oil prices rise, and increased as they fall – but Treasury heads George Osborne and Danny Alexander are reluctant.

The Prime Minister said he wanted to see “some method of sharing the pain between the taxpayer and the motorist”.

Friends of the Earth’s Policy and Campaigns Director Craig Bennett today said: “The reality is that global factors mean the days of cheap fossil fuel are over and the government must help us move to low-carbon transport to take the sting out of these price shocks.”

He said a fuel price stabiliser could “help iron out sudden changes in petrol prices”, but stressed that it must also “ensure fuel prices gradually rise and be coupled with efficient public transport, walking and cycling incentives for short journeys and moves to encourage motorists to switch to smarter vehicles that use less fuel”.

“If Mr Cameron’s government can wean our transport system off of its addiction to oil, its aim of being the greenest ever will be heading in the right
direction,” said Mr Bennett.

Mr Osborne is under increasing pressure to act over fuel prices from all corners of the UK. This week Scottish Finance Minister John Swinney wrote to him demanding action. He said: “With a further rise in duty scheduled for April, Westminster must take urgent action to tackle this. The Chancellor will collect around £12bn in tax on North Sea oil revenues this year – around £2bn more than expected if oil prices remain at their elevated levels – so he has the resource to bring the relief motorists and local economies desperately need.”