Levy on oil industry as Budget slashes consumer petrol tax

Companies in the oil industry will find themselves subjected to a tax levy that was announced in this week's Budget.

Chancellor George Osborne revealed that UK consumers would enjoy a petrol duty reduction of 1p per litre from 18:00 BST on March 23rd onwards.

Meanwhile, the planned 5p per litre hike has been put off until 2012.

Furthermore, he also explained he would be introducing a Fuel Fair Stabiliser in order to keep prices to a consistent minimum.

Funding the changes will be an increased levy on the oil industry in the North Sea.

The tax is set to total some £2 million - something that has caused industry figures to voice concerns over damage to the sector.

"This change in the tax regime will decrease investment, increase imports and drive UK jobs to other areas of the world," comments chief executive of trade body Oil and Gas UK Malcolm Webb.

Recently, Malcolm Brinded, upstream director for Shell International, claimed that turning to natural gas could help the world reduce its dependency on the oil industry.