Jump to content
House Price Crash Forum
Sign in to follow this  
Levy process

Rising Oil Prices Improve Uk Competitiveness

Recommended Posts

Just a thought:

The hauliers etc. who are planning to protest and possibly start refinery blockades have complained in the past that high fuel tax makes it difficult for them to compete with other countries where fuel tax is lower. But if more of the cost of oil, petrol, diesel etc is made up of the cost of the actual fuel, then as a percentage the fixed fuel tax becomes a smaller fraction of the total, and hence less of a competitive disadvantage in percentage terms. So if they can compete now, then in a case where there is a rise in the cost while fuel taxes stay fixed, they can surely compete more easily?

Share this post


Link to post
Share on other sites

...if more of the cost of oil, petrol, diesel etc is made up of the cost of the actual fuel, then as a percentage the fixed fuel tax becomes a smaller fraction of the total, and hence less of a competitive disadvantage in percentage terms. [Levy process]

Exactly so; their complaint has no merit.

Share this post


Link to post
Share on other sites
Just a thought:

The hauliers etc. who are planning to protest and possibly start refinery blockades have complained in the past that high fuel tax makes it difficult for them to compete with other countries where fuel tax is lower. But if more of the cost of oil, petrol, diesel etc is made up of the cost of the actual fuel, then as a percentage the fixed fuel tax becomes a smaller fraction of the total, and hence less of a competitive disadvantage in percentage terms. So if they can compete now, then in a case where there is a rise in the cost while fuel taxes stay fixed, they can surely compete more easily?

True, but you need to consider the very large road taxes that the hauliers pay also, plus the ability of the French government to whine at the oil companies and get them to cut prices overnight...

Share this post


Link to post
Share on other sites

I was mentioning a similar thing to my parents a few weeks ago...

"At least high oil prices don't effect drivers as much as the rest of the world. Because if oil price doubles, it only goes up 15% (ish) at the petrol pumps!"

My parents burst out laughing saying that's the only good word I have said about Labour/the Economy/Taxes... ever!

(I was talking toungue in cheek when I said that)

Share this post


Link to post
Share on other sites
In which case lorry drivers should be calling for the nuking of oil fields!  :blink:

No, because if oil prices go to astronomical levels, then although they have a more level playing field, and hence less of a disadvantage, the problem then would be that nobody could pay for their services.

If they were complaining about the high cost of oil meaning that the demand for haulage was collapsing (i.e. global depression on a mega scale), then that would make sense, although it hasn't got that bad yet. But if they were complaining about that, then fuel tax would be a piffling small fraction of the cost, and so moaning about fuel tax wouldn't help.

But that's not what they are complaining about (on the face of it anyway); what they are complaining about is fuel tax. They are complaining about the relative size of our fuel tax (large) compared to European fuel taxes and the resulting anti-competetitive effect of this. My point is, that if that is their complaint, then as fuel prices rise to make the taxes smaller as a fraction of total cost, the competitive disadvantage becomes reduced automatically, and hence there is no logical sense in compaining about fuel tax when oil prices are rising.

(For example, imagine oil prices fell massively, such that a litre of diesel cost 1p. Then a fixed tax rate of 50p a litre, for example, is a massive fraction of the total cost, and compared to a country which had a rate of say 30p a litre, would be a massive competitive disadvantage. But if oil prices rise massively, such that a litre of fuel costs £100, it is insignificant whether fuel tax was 50p or 30p a litre. This demonstrates that complaining about fuel tax as oil prices rise makes no logical sense if the complaint is about comparitive competitiveness with other countries, which it was last time the hauliers protested).

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.