This Is Guernsey

By Joel de Woolfson

DIESEL users have spoken of their shock that prices will rise by at least 50% from 1 January. Many businesses and motorists said they had been unaware of the size of the increase.

Both diesel and petrol will have a duty of 27p next year - plus any increase imposed by the imminent Budget.

Diesel, which currently has no duty, will rise by that figure whereas petrol, which currently has a duty of 13p, will rise by only 14p to cover the cost of the States decision to scrap road tax.

Guernsey Motor Trades Association chairman Dave Beausire said he had thought both fuels would rise by 14p a litre.

‘We were all told that 14p covered road tax being scrapped,’ he said.

‘But now they are saying that 14p a litre doesn’t cover road tax if you drive a diesel car.’

He said the extra 13p being levied on diesel fuel had not been understood by all.

It was mentioned in October 2006’s Billet d’Etat that duty on diesel and petrol would rise to approximately 21p a litre.

Then, in last year’s Budget, a further 6.2p was added to petrol.

The first time the 27p duty on diesel appeared officially was in the Billet for June this year, when the House discussed marine fuel exemptions.

‘I quite expected duty to go on diesel, but to make it the same as petrol all in one go has shocked me,’ said Mr Beausire.

But Treasury minister Lyndon Trott said the department had been clear about the plans from the beginning.

‘It is difficult to imagine how we could have been any more open and honest,’ he said.

‘This change has been known about for some considerable time and was debated again by the States as recently as four months ago.’

The rise means that for the first time, diesel will be more expensive at garage forecourts than petrol.

Taking prices at Le Mont Saint Garage, diesel is currently 57.4p a litre with petrol costing 65p.

From 1 January, diesel will rise to at least 84.4p per litre while petrol will rise to at least 79p.

‘When we have been ridiculed for the pricing of fuel in Guernsey for the last few years, in one swipe of the pen Treasury and Resources have put 13p extra a litre on diesel,’ Mr Beausire added.

‘It beggars belief. What business can swallow a 50% increase in costs and not do anything about it?’

Mike Newsom, who runs Delta Taxis, said he had found out about the size of the increase only through his supplier.

‘My fuel bill is going to go up by £25,000,’ he said.

‘Environment has acknowledged there might have to be a fare increase to reflect the extra tax.’

Channel Express general manager Martyn Langlois said that his company would lose money.

‘Overall, we are going to pay more and I’m not happy with the change and I made that clear to the deputies when it was proposed,’ he said.

‘I can’t tell exactly how bad it will be for the business yet, but diesel and labour are our two big costs.’