Thing is, what a lot of people fail to understand is that the price of fuel controls virtually everything in terms of retail. The price of a can of coke is affected by the price of fuel. The more fule goes up, the more companies, distributers, hauliers, etc have to spend, thus the price of goods rises.
So look at it from the government's point of view. They raise the duty on fuel and gain some money from it. As a result the price of goods/products delivered to shops/etc goes up as running costs increased with the fuel price increase. When the price of a product goes up, the ammount of VAT, being a percentage, also increases. Ooh look - the government made a little more money....
I do not belive the buyer controls the market in this kind of case. The government do. And I'm sorry but I fail to see how the British public can influence the government on a large enough scale to force them to reduce the tax levied on fuel - as lets face it, our governments, in one form or another, have been fucking us for years - why would they "lose" money to us now?