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Government meets oil and gas industry after tax hike

The Government has met with the oil and gas industry to hear their concerns following the announcement of a windfall tax on their profits in the budget.

The Government has met with the oil and gas industry to hear their concerns following the announcement of a windfall tax on their profits in the budget.

Energy and climate change secretary Chris Huhne said that the government would be “considering some of the points that they made” after the meeting to discuss the rise in the North sea oil and gas levy from 20 percent to 32 percent to pay for a cut in fuel duty.

“They expressed their concerns about the impact of the Budget on investment in the North Sea oil and gas sector and we’re listening to that and we want to understand it more carefully with detailed figures and we will take that away. There are elements of what the Chancellor announced which were up for consultation including the issue of the oil price at which the fair fuel stabiliser operates,” he said.

The economic secretary to the Treasury Justine Greening added: “We put forward a reduction in fuel duty at the Budget rather than the planned increase and that has to be fully funded so we will progress with our plans. But there is an element of that which is around how we put in place the fair fuel stabiliser and we will now work with the industry to make sure we can do that in a responsible way.

“In the Budget document it clearly says we want to work with a range of stakeholders in the oil and gas industry, and road transport organisations who have been affected by fuel costs, to make sure we put in place a fuel stabiliser that actually works. We had a good discussion with the industry about the key points they are now keen to see on the table, including the strike price, and those conversations will now take place.”

The chief executive of trade body Oil & Gas UK Malcolm Webb said the discussions were “full and frank”.

 “The meeting recognised the concerns arising out of the new measures in the Budget for gas fields, new field developments, decommissioning, mature fields, infrastructure and the supply chain/ A meeting is to be arranged between industry and the Chancellor of the Exchequer. The Government wishes to engage with the industry to investigate whether the negative impacts of the tax increase can be mitigated,” he said.

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