Birmingham businesses need tax relief, not more oil production, to ease the pressures of the petrol crisis, the city’s chamber of commerce has said.
As Prime Minister Gordon Brown met oil producers to ask for an increase in North Sea oil production, Birmingham Chamber of Commerce and Industry (BCI) said firms would go out of business unless the 2p fuel duty rise, proposed in the March Budget and due to come into effect in October, was axed.
A spokesman said: “The biggest impact of the petrol crisis is on businesses being forced into very dangerous margins.
“And they can’t put up prices because it’s so competitive. They are in a no-win situation. This just outlines that they have got to abandon the 2p tax increase, and sooner rather than later.
“Increasing production needs to be done years in advance, it’s not really anything that’s going to help the situation. It needs emergency action to prevent companies going bust.”
The Chancellor Alistair Darling said he would revisit the planned 2p increase, but Mr Brown said there was “no easy answer” to the global oil problem, describing the current conditions as the “third great shock” in the history of the oil business.
He said high oil prices - which have risen from $11 to more than $135 a barrel in the past decade - were here to stay, but refused to bow to protesters calling for tax relief. He also said the Government would be looking to diversify its energy options, with more emphasis on nuclear power in the future.
The Government also announced plans to increase production of North Sea oil, to try to make up for the shortage of supply that is driving high prices.
With fuel prices at record highs and drivers facing massive increases in road tax, BCI plans to host a seminar on how local firms can make plans to help their staff get to work without using as much fuel.
The free event on June 5 will let companies discuss the region’s transport network and learn how they can devise travel plans to improve their business.
Chamber chief executive Jerry Blackett, who is chairing the event, said: “Companies need to begin thinking of ways to help their staff get to work, for business reasons if not for green reasons.
“If petrol prices and taxation continue to increase at this current rate, it will make it increasingly difficult for those on lower incomes who drive to work to get to their factory or office.
“Businesses need to be aware of these issues and this event will explain how they can implement car sharing and other travel initiatives.”