Thursday, April 7, 2011

The anger starts

A55 go-slow planned to protest against fuel prices

A DOUBLE A55 fuel protest is planned next month after the price of diesel smashed through the £1.50 a litre barrier. Some filling stations are now selling diesel at nearly £1.52 with petrol being sold at a top price of around £1.42 across North Wales according to a fuel watchdog website.

Posted by mark @ 11:01 AM (1593 views)
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4 thoughts on “The anger starts

  • Fun facts:
    If your diesel costs 139.1p per litre*, 57.95p is fuel duty** and 23.18p is VAT. The thing is, fuel duty is more-or-less fixed (it has risen from 47p in 2003***); so most of the recent increase in petrol or diesel price is the cost of the underlying product, not tax.

    Looking at the oil price over the last six months, this becomes even clearer. Brent Crude has risen from $85 per barrel last October to $123 as I write this.****

    The UK’s drivers consume 47.6 billion litres*+ of fuel per year. That in turn generates £27.6bn in fuel duty alone, not including VAT. Cutting 15p off fuel duty merely brings petrol prices back to where they were in December*, while costing £7bn in foregone fuel duty (plus VAT, so £8.4bn). £8.4bn is equivalent*++ to 1p on basic income tax (£4.75bn) plus 1p on employees national insurance (3.6bn). Which tax would you like to increase to pay for cheaper diesel? (That’s a rhetorical question, before anyone mentions LVT.)

    *Source: The AA petrol prices: http://www.theaa.com/motoring_advice/fuel/
    **Source: http://www.whatgas.com/car-finance/fuel-duty.html
    ***Source: http://news.bbc.co.uk/1/hi/uk_politics/4653175.stm
    ****Source: http://www.oilnergy.com/1obrent.htm
    *+Source: http://www.farmersguardian.com/home/news-analysis/why-does-fuel-cost-so-much?/36719.article
    *++Source: http://www.parliament.uk/business/publications/research/key-issues-for-the-new-parliament/the-public-finances/structure-of-taxation/
    (Any figure not sourced is calculated.)

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  • Why pay for a subscription to FT.com when drewster produces this stuff for free?

    Great post.

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  • Spot on, drewster. And oil is cheap at $120 a barrel when you think what it is capable of doing. A barrel of cheap wine costs a lot less. And decreasing oil supply is inexorable, a fact of nature. So let them ‘protest,’ they might as well protest against the setting of the sun.
    N

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  • Cheers guys 🙂
    I still think the FT is a great read though. There’s nothing new in my post.

    @nickb,
    Yes definitely agree. Oil is amazingly cheap considering what it can do. I also think that high fuel duty is a good thing in that it should encourage the UK to be better prepared for a future of expensive oil. Sadly NIMBY and eco paranoia mean we aren’t living in a golden era of cheap nuclear power and shale-gas-powered vehicles.

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