THE Association of British Drivers (ABD) has called for Government action over spiralling fuel costs.

The ABD claims that sky-high fuel prices are a threat to the economy as they slow growth, aid inflation and divert financial resources away from other areas.

The solution, it argues, is for Chancellor Gordon Brown to introduce a sliding-scale fuel tax.

Tony Vickers, ABD's fuel tax spokesman, said: "The UK can do little to influence global oil prices but the Chancellor still has considerable power over domestic duties.

"Plans for road charging as an alternative to fuel duty are an expensive, long-term fantasy. Action is needed now to stabilise fuel prices."

The ABD has called for a fuel duty based on a percentage, which falls as oil prices rise and increases when they drop in order to keep petrol prices at around 70 to 75p per litre.

Although it concedes government fuel revenues may fall in the short term, the overall benefits of a stable fuel price and a strong economy would compensate them with more sustainable and healthy tax revenues.

Mr Vickers added: "In the long term the ABD would like to see fuel duties fall in real terms, they still account for more than 70 per cent of the price of every litre we buy.

"An immediate, drastic drop in fuel duties is an economic impossibility, but it would be possible to add a deflationary bias to a sliding-scale fuel duty that would compensate drivers over time for unjust revenue increases in the late nineties."