Fuel prices have climbed to record highs in recent weeks - in some cases surpassing even the £2 per litre milestone for diesel in Northern Ireland - and the Chancellor Rishi Sunak has come under renewed pressure to put new tax breaks in place to reduce the costs.
DUP MP Sammy Wilson, who is backing calls for more government action to bring prices down, said that if the Northern Ireland Protocol Bill passed by MPs on Monday night becomes law any VAT reduction the government puts in place would now also apply here.
Previously, the DUP had warned the post-Brexit trading arrangements could have prevented such measures from being implemented in Northern Ireland.
In the House of Commons yesterday, the Chancellor was urged by Conservative MPs to go further than the current 5p per litre reduction, amid concerns the policy “didn’t really touch the sides” for hard-pressed drivers.
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Mr Sunak said he would take the recommendations “under advisement”.
Speaking to the News Letter, East Antrim MP Mr Wilson said: “Given the extraoirdinary pressure this is putting on households and businesses, I think it is something the government should be doing.
“But what about its application in Northern Ireland? That would depend on how they decided to implement those measures. If they decide to do it by cutting VAT, it could not be implemented in Northern Ireland at the moment. However, if the [Protocol] Bill goes through and beceomes law, and the government takes the power that the Bill gives them to vary VAT rates and set aside that element of the Protocol that places us under the control of Brussels when it comes to VAT, then yes it could be implemented in Northern Ireland.
“In relation to varying VAT, what the Bill says is ‘the Treasury may by regulation make any provision about VAT including imposing or varying the incidence of the tax, and any excise duty’.”
Mr Wilson stressed, however, that if the government does decide to act to try and bring the cost of fuel down, it is important any tax reductions are passed on to motorists.
“The last time, I believe it was not passed on to consumers by a lot of petrol stations,” he said. “There has to be some way of verifying that when any cut is made that it is passed on.”
The latest weekly fuel prices here, according to figures published by the Northern Ireland Consumer Council on June 16, show that the average cost of a litre of petrol in Northern Ireland is 189.3p, and for diesel the average is 196p.
New figures are due to be published on Thursday.