A spokesman for HM Treasury As the chancellor has made clear, and European finance ministers recognise, the real issue is the international oil price which is a global problem requiring a global solution. The chancellor has said: 'We are sensitive to the concerns of motorists right across the country at a time of doubling oil prices. 'The first action we will take is to tackle the cause of the problem - ensuring concerted global action is taken to bring down world oil prices and stabilise the market for the long term.' It is worth noting that around half the fuel used in the UK bears little or no fuel duty, including the red diesel used by farmers, and the fuel used in industrial production, and the heating of homes and workplaces. The chancellor also called for concerted action to increase the use of alternative sources of energy and greater energy efficiency - and for the World Bank to set up a new fund to support developing countries investing in alternative sources of energy and greater energy efficiency. Currently duty differentials are in place to encourage the use of more environmentally friendly fuels.

Chris Hunt, UK Petroleum Industry Association director general If road transport taxation is reduced, it will need to go up somewhere else, but our position is that setting levels of duty on fuel is a matter for the chancellor. Whether that includes an element of taxation to encourage or discourage certain types of transport is a matter of government policy. We manufacture petrol and diesel that is, pre-tax, the cheapest in Europe if not the developed world - taxation does put it up to among the most expensive in the EU. I don't think you can say that taxation isn't an issue - fuel duty and VAT is 68-70% of the total pump price. Gordon Brown is calling for more investment to go into production and refining, and we obviously would like to see investment in UK refineries, but the government has to create the right environment for that investment to happen in the UK. If the regulatory environment for UK refineries, compared with EU refineries, is more punitive, companies are more likely to invest in a French or German refinery, say, than in the UK.

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