Recently in Taxation and Fuel Prices Category

The out of touch Conservative / Liberal Democrat government politicians managed to cause unnecessary panic buying of petrol and diesel fuel, ahead of a threatened strike of (well paid) tanker drivers belonging to the Unite trades union.

Cabinet Office Minister Francis Maude's stupid remarks about storing "jerry cans" of petrol at home in your garage, were seized upon by not just the tabloid media, but by tv and radio broadcasters like the BBC and Sky.

The equally out of touch Labour opposition (who were astonished that they managed to lose a "safe" seat to the extremist demagogue George Galloway at the Bradford West by-election on Thursday) spent most of the week feeding the tabloid press with their views about the irrelevant to most people, policy of charging VAT on hot pasties and on publishing a list which Conservative party political donors had had private dinner at Prime Minister David Cameron's home.

Labour in turn had to reveal that that Len McCluskey, the boss of the Unite Union, which has paid the Labour party at least £5 million, has had a private meetings or dinner with Labour leader Ed Miliband on 8 occasions since the General Election. Was the tanker drivers dispute discussed during those private meetings ?

The individual members of the general public cannot be blamed choosing to purchase more petrol or diesel than they have done historically at this time of year, especially given the massive media hype and propaganda and apparent political dithering they have been subjected to.

The Unite trades union is partly to blame, for not making it clear to the dim witted, short attention span mainstream media, exactly when they were proposing to take industrial action. Apparently this will not now be before or during the Easter Bank Holiday (a favourite target for UK and foreign transport related strikes) as many people jumped to the conclusion that it would be.

The Government is partly to blame for talking of "Preparedness", the training of Army drivers and the notorious "jerry cans", but again, not making it precisely clear when these measures were expected to be used.

It is not entirely the mainstream media or the internet social media's fault - they can spread rumours and misinformation rapidly, but they can also help to quash such rumours and panics, if they are used properly.

Will this self-inflicted Fuel Crisis be compounded by the planned rise in Fuel Duty (again, regardless of whether the world price of oil actually falls) this coming August ?

PA via The Independent reports:

Petrol price surges to 130p a litre

PA

Tuesday, 1 March 2011

Average petrol prices have passed the 130p a litre mark for the first time, the AA said today.

Prices at the pumps have reached an average of 130.03p a litre - only 2p away from the £6 gallon.

Diesel is now averaging 135.44p a litre, the AA said.

It added that at the start of the year, petrol averaged 125.19p a litre before hitting 127.74p following the VAT rise on January 4. Diesel started at 129.30p before reaching 132.01 after the VAT increase.

A year ago, the pump price of petrol was 112.74p and diesel 113.79p. This means that filling up a typical 50-litre petrol tank now costs £8.65 more than a year ago. A two-car family is now paying £36.71 a month more for petrol than a year ago.

AA president Edmund King said: "Now that petrol has hit record highs at the pumps the Chancellor must abandon the proposed tax hike (next month) and seriously consider reducing fuel duty to stabilise prices.

[..]

Whatever happened to the Conservative party "Fair Fuel Stabiliser" consultation back in 2008 ?

Will Chancellor George Osborne actually implement these ideas in the forthcoming Budget ?

Various media report that Petrol prices have reached record levels of around 120p a litre, perhaps over 130p a litre in some rural areas.

The useless Labour government has presided over an utterly inept "Energy Policy" and has so mismanaged the economy in general, that the UK is now being hit by fuel price increases in part due to the weakness of the £ pound against the $ dollar.

To add further insult, the Treasury has gone ahead with its increase in Fuel Duty, with more to come.

Remember that the actual tax on petrol is over 180%, if you ignore the weasel words which are used to separate VAT from the Fuel Duty tax

Tax is tax and the price of petrol at the refinery gate is a tiny fraction of the tax taken by the greedy Government.

If you get the chance to talk to prospective Parliamentary candidates, of whatever political party, then ask them in public, in front of as many mainstream media journalists as possible, what exactly they will do to reduce the burden of fuel prices, if they are elected.

Punish the politicians who are vague or ignorant or who can see nothing wrong in the current and predicted price of fuel, by not voting for them and by telling all your friends not to vote for them either.
.
Doing nothing politically in this General Election, by not voting, or by not questioning political parties and candidates on their Fuel / Energy price policies, is a recipe for financial ruin and misery for you and your family.

The Mail on Sunday documents what we all know from our empty wallets:

British diesel tax is highest in Europe

By Andrew Baxter and Martin Delgado
Last updated at 3:01 AM on 08th November 2009

British motorists pay more tax on diesel than drivers in any other European Union country, according to Government figures which also reveal that we pay at least 12p a litre more than other nations.

Fuel duty and VAT account for 66 per cent of the pump price, says the Department of Energy and Climate Change. In some EU countries, these taxes make up only 42 per cent of the price.

The overall cost of diesel is also highest in the UK, with the average price of a litre 106.6p, of which 70.1p goes on tax and duty.

[...]

The Department of Energy report says the average price of a litre of diesel in the UK in September was 106.6p. This compares with 73.5p in Bulgaria, the lowest in the EU. Motorists in France pay on average 89.2p, of which 52.2p goes on tax. Germans pay 94p, of which 56.4p goes on tax. Figures for other EU states are: Denmark, 93.5p (52.4p tax); Ireland, 92.4p (52p); and Spain, 82.4p (41.3p).

Typically, the Mail on Sunday does not bother to quote the name of the report, or to provide an online URL link to it.

Various statistics on fuel prices are published by the misnamed Department of Energy and Climate Change:

Energy statistics: prices, where you "can download annual, quarterly, monthly and weekly statistics in Microsoft Excel 2000 format"

The Weekly Fuel Prices Table (.xls) is updated each Tuesday at 9.30 am.

[...]

Unleaded petrol is also at its highest price for 2009, according to the AA. The average at the end of October was 107.14p a litre, beating the previous high of 107.03p.

Remember that this scandalous taxation regime is with the temporary 15% VAT rate,

Things will be even worse when VAT goes back up to 17.5% (or even higher) in less than 2 months time

The Daily Mail reports:

Petrol prices set to rise by 5p a litre by September as wholesale costs soar

By Ray Massey
Last updated at 10:38 PM on 07th August 2009

Petrol prices are set to soar by up to 3p a litre at the height of the holiday season this month because of rising wholesale costs, the AA warned today.

But motorists face a double whammy from September 1 when the cash-strapped Government imposes an additional and controversial 2p a litre tax rise at the pumps to swell depleted Treasury coffers - making a 5p a litre rise in total.

Rising prices of oil and an 8 per cent rise in the wholesale cost of fuel - both driven in part by speculators - are blamed for the initial 3p hike which will add £1.50 to the average fill-up.

Pump prices have already risen by a penny over the past fortnight and currently stand at 103.13p a litre for unleaded and 103.87 for diesel.

The 3p a litre price rises now in the pipeline will see fuel at the pumps in excess of 106p a litre.

But Government tax rises will add to the pain felt by Britain's 30 million motorists when Chancellor Alistair Darling imposes another 2p a litre tax hike on September 1, taking the price up to around 108p a litre.

[...]

So what exactly is the Minister Ed Miliband doing about these price rises, at the so called new Department of Energy and Climate Change ?

Precisely nothing to help ordinary people, as usual.

Gordon Brown has wasted some 20 million of our pounds on hosting the G20 summit, but from his media spin perspective, it has succeeded in diverting media attention from the 2p per litre rise in Fuel Duty which came in on 1st. of April.

Do not forget who is to blame for this deeply unpopular policy, when you get a chance to vote against Labour, at the 4th June European Parliament and Local Council Elections.

Alistair Darling has increased Fuel Duty by 2p per litre from 1st December, with a further rise of 1.84 p per litre in April 2009 (only 5 and a bit months away) , and more in 2010.

This will to wipe out any saving on fuel from the temporary 2.5% reduction in VAT.

See today's Pre-Budget Report (.pdf)

[...]

Fuel duty

7.38 It is the Government's policy that fuel duty rates should rise each year at least in line with inflation as the UK seeks to reduce polluting emissions and fund public services. However, in response to record peaks in fuel prices earlier this year, the Chancellor announced that the 2 pence per litre increase planned for April 2008 would be postponed.

7.39 As a result of falling oil prices, pump prices have now fallen by more than 20 pence
per litre from their July peaks. The Pre-Budget Report therefore announces that the 2 pence per litre increase in fuel duty planned for 2008 will now take place on 1 December 2008. However, as a result of the 2.5 per cent cut in VAT this December, the cost of petrol and diesel will fall for private motorists who should see no increase in the price they pay at the pump this year from this measure.

7.40 The Pre-Budget Report also confirms that, as pre-announced in Budget 2008, main
fuel duties will further increase by:

• 1.84 pence per litre on 1 April 2009; and
• 0.5 pence per litre above indexation on 1 April 2010.

7.41 Duty rates for rebated oils will also rise in proportion to main road fuel duties
on these dates. The duty differential for compressed natural gas will be maintained until
2010-11 and the differential for liquefied petroleum gas will decrease by 1 pence per litre on these same dates.

VAT will only be reduced from 17.5% to 15% until the end of 2009.

Will the Chancellor immediately reduce Fuel Duty at the end of 2009 when VAT goes back up ?

Will he immediately reduce the level of Fuel Duty when, not if, the price of crude oil increases again ?

Surely this is a blow to the hard pressed Road Haulage and Farming industries ?

The Times reports:

Alistair Darling scraps 2p fuel duty rise

From Times Online
July 16, 2008
Alistair Darling scraps 2p fuel duty rise

Philippe Naughton

Alistair Darling, the Chancellor, has bowed to massive public and political pressure and scrapped a 2p rise in fuel duty planned for this autumn.

The move emerged in a written answer to a parliamentary question and was confirmed in a Treasury statement shortly after official figures showed that the number of people claiming unemployment benefit was climbing at the fastest rate for more than 15 years.

Mr Darling announced in this year's Budget that he was deferring a long-scheduled 2p rise until October 1. With oil prices soaring - delivering a tax windfall to Government - motorists and hauliers have questioned both the need and the wisdom of a further rise in duty.

Today's move means that the planned rise has been deferred again, until at least April next year.

[...]

In its statement, the Treasury said that main road fuel duty rates would remain at 50.35p after October 1. "This is 17 per cent lower in real terms than in 1999," it said. "Consequential, planned increases in road fuel gases, biofuel duty rates and rebated oils rates will also be postponed."

[...]

The timing of this announcement is suspicious, and likely to have been influenced somewhat by the Labour government's poor opinion polls and desperation over the Glasgow East by-election in two weeks time.

The nonsense about being "lower in real terms than in 1999" would only be meaningful if none of the other taxes grabbed by the Treasury had gone up since then.

The Conservative Shadow Chancellor of the Exchequer George Osborne seems to be hinting that a future Conservative Government would "Do Something" about Fuel Duty on petrol and diesel.

The BBC reports:

Tories propose fuel duty changes

Sunday, 6 July 2008 16:37 UK

The Conservatives are proposing changes to the way fuel duty is calculated which they say would let government "share the pain" of rising prices.

Shadow chancellor George Osborne told the BBC the party was looking at plans to cut fuel duty when oil prices rise and increase it when prices fall.

If introduced last March, fuel would now be 5p a litre cheaper, he said.

The Treasury told the BBC the proposals were a gamble which could leave a £3bn hole in the public finances.

Fuel duty is due to rise in October but there has been speculation the increase will be delayed due to soaring oil prices.

[...]

But Mr Osborne told BBC One's Andrew Marr programme: "We are proposing a totally different way of doing fuel duty.

"Under the current system you wait for Gordon Brown to drop hints at select committees or Alistair Darling to come on this programme to make hints about what he may or may not do with the 2p.

"Not only is that an insult to families who want some clear direction from the government, but it is also extremely destabilising for the public finances."

Record oil price

He said the consultation process on a "fair fuel stabiliser" would begin on Sunday and conclude by the end of the year when the party would come up with a fully worked-out proposal. The policy is not yet a firm party pledge.

"What this would mean is that when the price of oil goes up, fuel duty comes down to help families, but the quid pro quo is that when the price of oil falls the duty goes up," said Mr Osborne.

"So government is sharing the pain of rising oil prices, but the government is also sharing the gain when oil prices fall."

[...]

How exactly would this work in practice ?

Presumably it is somewhere in between the current evil grasping Labour Government fuel tax regime, which, because of its fixed fuel duty plus periodic increases, plus VAT on top of that, grabs excessive taxes from the public as the price of crude oil rises, and a simpler fixed percentage tax which is automatically linked to the price of fuel at the refinery gate e.g. no Fuel Duty , but a VAT rate of 20% on fuel.

Is this is good idea ? How will they pay for any shortfall in public finances ? WiIl they make the tax collection system more or less complicated and bureaucratic ?

You can read the Conservative's Consultation Document:

A Fair Fuel Stabiliser: A consultation on the future of fuel taxation (.pdf)

[...]

Under a Fair Fuel Stabiliser, when fuel prices go up, fuel duty would fall. And when fuel prices go down, fuel duty would rise.

[...]

5.1 The closing date for responses to this consultation is 19 December 2008.

5.2 Responses should be sent to:

Fair Fuel Stabiliser Consultation

Office of the Shadow Chancellor, George Osborne MP
House of Commons
London
SW1A 0AA

5.3 Or by email to contact@georgeosborne.co.uk Please include the words 'Fair Fuel Stabiliser Consultation' in the subject.

5.4 Responses to this consultation will be used to inform our policy development
process.

Presumably, the relatively lengthy consultation period is designed to tempt the unpopular Labour Prime Minister Gordon Brown and his hapless Chancellor of the Exchequer Alistair Darling, to try their usual NuLabour "political triangulation" trick of responding, to Tory taxation ideas, and then spinning the media, and pretending that they thought of it themselves (like the capital gains tax idea), before the next scheduled 2p per litre rise in Fuel Duty is confirmed or is abandoned in October.

Is Chancellor of the Exchequer Alistair Darling actually in control of fuel and transport taxes ?

Following yesterday's successful Transaction 2007 organised fuel protests in London by lorry drivers, The Times reports:

Brown pre-empts Darling with signal that fuel duty rise will not go ahead

From Times Online
July 3, 2008

Philip Webster, Political Editor

Gordon Brown gave his strongest signal yet today that the Government will not go ahead with the planned 2p-a-litre increase in fuel duty due in the autumn.

Giving evidence to the Commons Liaison Committee, the Prime Minister virtually pre-empted his Chancellor by saying that past increases had not been implemented.

"I think you will find that in most years since 2000 that the duty has actually been frozen," he said.

Mr Brown said any decision on fuel duty would be for Alistair Darling in his Pre-Budget Report in the autumn. He added however: "It is clearly a matter that will be looked at very, very carefully over the next few weeks."

It was the second day in a row that Mr Darling has found others making concessions for him.

Labour MPs admitted yesterday that they had been told by the whips that he would make changes in his controversial plan to charge higher excise duty on heavy polluting cars bought since 2002. The Treasury ministers gave no such guarantee in the debate but MPs believed the whips and the Government won the day. Only six Labour MPs voted against the Government, even though 50 had voiced their concerns.

[...]

The Prime Minister said that the Government would be bringing forward further measures to help low income families with their fuel bills.

"If we can take measures that will help people cut their energy bills by using energy more efficiently or finding a way that we can help them cut the consumption of energy we will do so," he said.

There is no technical barrier to Gordon Brown / Alistair Darling doing that right now, with the stroke of a pen, only the political and economic mess which they are responsible for.