Osborne 'cannot stop petrol hikes'

The Chancellor may have used the Budget to cut fuel duty but he admits he has no power to prevent oil firms hiking the cost of petrol and diesel.

But George Osborne vowed to make sure there is "no funny business" that would increase the burden on drivers already facing higher costs in other areas, such as car insurance.

After cutting 1p per litre off fuel duty, he said he would watch "like a hawk" to see how companies react. His Budget measures to help motorists also included a Fair Fuel Stabiliser, which will be paid for by a windfall tax on oil firms as global prices hit record levels.

Mr Osborne told the Daybreak programme on ITV1: "We will be watching like a hawk to make sure that motorists get the benefit of the budget changes and make sure that there's no funny business."

But asked if there was a way to stop oil firms hiking prices, the Chancellor said: "I'm not in control of the world's oil price, unfortunately.

He continued: "What I am in control of are the taxes that go on to oil in Britain, in other words the duty that gets levied at the petrol station. I'm not pretending that this is going to transform the situation overnight for families who are feeling the squeeze, but it helps."

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