When plans were first announced last year for a rise in VaT to 20 per cent, few imagined that retail price inflation would be grazing 5 per cent just ahead of the increase. and when the government pre- announced another rise in fuel duty to take effect this april, even fewer imagined the oil price would be touching dollars 100 a barrel and that petrol ahead of this latest impost would be costing as much as GBP1.40 a litre at the pumps. Such prices are of particular concern in Scotland, where distance travel is often unavoidable and where fuel costs are significantly higher for rural industries.  This is the background against which finance minister John Swinney has written to Chancellor George Osborne demanding action to tackle rising fuel prices. He has called for the establishment of a fuel-duty regulator which would aim to cut the tax take on petrol when the oil price went up, and raise it when prices were low. at present, about 70 per cent of the cost of a litre of petrol at the pumps comprises tax in one form or another.  In petrol price politics, it is easy to play the card calling for lower prices. But it presents two awkward problems. The first is the stated commitment of the Conservatives and Liberal Democrats to bear down on the budget deficit and debt. It was to help bring about this reduction that a further fuel duty boost was planned, rather than resort to yet further cuts in government spending. If the Chancellor does succumb to Mr Swinney's strictures, he puts these deficit reduction targets at risk.  The second is the stated policy of both the Conservatives and the Lib Dems to bear down on CO2 emissions and fossil fuel consumption: the green agenda. Tory leader David Cameron talked of a fair fuel mechanism that would put taxes up when the oil price was low and falling, and cut them when the price was high. This would be a relatively less painful - or less obvious - way to extract higher tax from the motorist. However, being seen to cut fuel taxes now would risk vocal opposition from the Green lobby and create difficulties for the minister for climate change, Christopher Huhne.  On the balance of argument, there would seem to be a case for the Westminster government to cancel or postpone the forth- coming fuel duty increase. First, inflation is now a serious policy worry within the Bank of England. There is a growing likelihood that the Bank's monetary policy committee may move to raise interest rates considerably earlier than had been expected. This would be a big setback for recovery prospects.  anything that helps to mitigate inflationary pressures would be helpful. and such is the effect of a higher oil price that the government will already be enjoying oil tax revenues appreciably higher than those budgeted for. This would provide some leeway for a postponement until price pressures subside.  Oldham offers few clues to coalition's prospects  So MUCH has changed since the General Election last May that the first by-election test of the coalition and of Labour under the leadership of Ed Miliband was bound to attract close scrutiny. In the febrile commentary of the spin doctors, all the main parties laid claim to some satisfaction.  The Liberal Democrat vote did not suffer a widely predicted meltdown, with the candidate securing 11,160 votes. Indeed, the Lib Dem share of the vote actually rose. However, Debbie abrahams, the Labour candidate, was a comfortable winner with 14,718 votes, a result that will have been greeted with huge relief by the party's leader. The Conservatives, widely thought to have run a low key campaign to boost Lib Dem prospects - a claim strongly denied by the leadership - saw their vote tumble to just 4,481. The Tory Right is deeply unsettled.  Ju