Chancellor's petrol tax cut

Tax on unleaded fuel will be temporarily lowered in line with the expected 2p cut in the duty on environmentally-friendly ultra-low sulphur petrol (ULSP), signalled by Chancellor Gordon Brown in November in his Pre-Budget Report.

The move, announced by Financial Secretary Stephen Timms, came after independent petrol retailers warned that thousands of filling stations would still not be selling the new ULSP by Budget day on March 7.

In November, Mr Brown said he expected motorists "using any petrol station in Britain" to be able to benefit immediately from cheaper ULSP when duties came down in the Budget.

Mr Timms said the temporary duty cut for unleaded petrol was a "sensible measure" which would "guarantee that all motorists would benefit from a cut in duty on Budget day".

The cut in unleaded duty will run until June 14, taking it safely past the date of the expected spring General Election.

Shadow Chancellor Mich-ael Portillo warned that it would not "buy off" the fuel protestors.

"Labour's rushed announcement shows that the Government is in an unholy mess," he said. "No one will be taken in. This won't buy off the protests."

Liberal Democrat transport spokesman Don Foster accused the Chancellor of "opportunism", saying that ULSP was unlikely to be much more widely available by June.

"It is intended to see the Government through an election period. This cut is plainly a pre-election stunt. It is a bribe to pacify motorists."

The move was effectively forced on the Government after representatives of the independent retailers told Mr Timms and Transport Minister Lord Macdonald that many of their 5,000 filling stations still did not stock ULSP.

Although the major oil companies have said they are on track to supply ULSP at all their filling stations by the end of March, the independents said it was taking them longer because of capacity constraints on UK refineries