Brown may ditch fuel duty increase

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Appearing before MPs, the Prime Minister warned that pressure on energy prices could continue for years to come as demand from the rapidly developing economies of China and India surged ahead.

His latest twice-yearly evidence session with the Commons Liaison Committee, made up of senior MPs who chair the various select committees, came as the price of a barrel of Brent crude broke the 146 US dollar mark for the first time.

Pressed on whether the 2p fuel duty increase due to take effect on October 1 would now be implemented, the Prime Minister said pointedly that often in recent years such increases had not gone ahead.

"I think you will find that in most years since 2000 that the duty has actually been frozen," he said.

While he said that any decision would be for Chancellor Alistair Darling, he added: "It is clearly a matter that will be looked at very, very carefully over the next few weeks."

Senior ministers, led by Business Secretary John Hutton, have reportedly been pressing Mr Darling to make a statement before MP break for the summer recess at the end of the month.

After that Parliament does not sit again until after the increase is due to be implemented. However, the Prime Minister's spokesman indicated that an announcement could be made during the parliamentary break.

Mr Brown and Mr Darling have been under intense political pressure to abandon the 2p increase - announced in the Budget in March 12 - as rocketing oil prices have pushed up the cost of petrol at the pump for consumers and business alike.

Mr Brown however rejected claims that lower taxes on fuel in continental Europe made it impossible for UK hauliers to compete with their overseas rivals.