Slashing the cost of fuel - would it help?

[martin84]

smegmore said:

??????

I don't understand the logic here, however, whilst I'm mulling it over I'll have a pint of whatever you're drinking.

In a way he's right. An artificial - and therefore controllable - price of something makes for a more stable price and protection from outside influence. In the case of oil the outside influence is obviously more than considerable. It enables you to build your economy and marketplace around that controlled price instead of the situation in America where their market and economy is built around a price which is much lower but open to sudden change. Some will say working from what the product actually costs is better and more natural which is perfectly reasonable but I don't mind the idea of stabilising it artificially in principle.

However; The only good argument I have ever heard for high fuel tax is you can reduce it when oil prices spike. The problem is Government never actually does that does it? The other problem is Government becomes too dependent on a very easily obtainable income stream. Raising fuel duty is easy - too easy in fact. That addiction of the Government leads to fuel tax going beyond stabilising a price and into punishing the public and damaging the economy.

[Justayellowbadge]

smegmore said:

??????

I don't understand the logic here, however, whilst I'm mulling it over I'll have a pint of whatever you're drinking.

Crude example.

If fuel costs £1.10, of which £1 is tax, 5p the cost and 5p the retailer's profit.

Double the cost of production, and the fuel still only costs £1.15.

Without the tax element, it would have risen by 50%.

[martin84]

Justayellowbadge said:

Without the tax element, it would have risen by 50%.

Yes but what is 50% of fk all?

[AJS-]

I would expect that if they made a less dramatic cut, say 10p, tax revenues would actually go up. People would drive more, but not necessarily spend any more money when they got there. On the other hand they might just not drive any more, pocket the difference and spend it on something else.

[muffinmenace]

Bad idea, we want to lower our dependence on oil and escape the instability it can bring to our economy when the price rockets.

Taking the gamble of lowering the cost of fuel so much that we then sell enough fuel to offset the loss in % revenue from each Litre is a massive gamble and strikes me as the same kind of thinking from Labour that 'slashing' VAT by 5% will also...kick start the economy. We've got to get a more sustainable tax take than just playing with numbers to get a small bump.

[otolith]

I think anything which restricts employee mobility is a bad thing for the economy at the moment.

[oyster]

martin84 said:

Justayellowbadge said:

Without the tax element, it would have risen by 50%.

Yes but what is 50% of fk all?

Since fuel prices are a much bigger issue in the US than they are here, I'd say big price fluctuations are actually more impacting on consumers and voters than stable, higher prices.

[joema]

So many arguments for and against.

On the one hand people have more to spend on retail, assuming they don't save money. But.
Look at how much traffic is on the roads.

Would car journeys increase? Marginally?. Would we just see a shift away from high mpg cars? Unlikely? So with that I doubt taxes would recover through doubling sales....

It seems fuel is expensive but we just seem to put up with it. I doubt we'll ever see cheap fuel again

[martin84]

oyster said:

Since fuel prices are a much bigger issue in the US than they are here, I'd say big price fluctuations are actually more impacting on consumers and voters than stable, higher prices.

Define 'much bigger issue' please. What percentage of the average take home pay does the average American spend on fuelling the car? Give me numbers

[IainT]

otolith said:

I think anything which restricts employee mobility is a bad thing for the economy at the moment.

Indeed we spend ~£60 a week just on the commute to work. It's a significant outlay and both me and the wife have reasonable salaries.

[louiebaby]

martin84 said:

Define 'much bigger issue' please. What percentage of the average take home pay does the average American spend on fuelling the car? Give me numbers

It's difficult to comment on that alone. Taxes are lower generally in the US, but their healthcare and higher education, for example, is more privatised. Taxes are higher in Scandanavia, but their public services are better than ours.

The US economy is kind of based around low taxes, and then buying the services that you want.

Consider being a contracter vs an employee. A contractor earns more, but gets no holiday or sick pay for instance.

[Sticks.]

jbi said:

Fuel is the lifeblood of this country. How much we pay for almost everything we buy is dictated by the price of it.

This seems to be ignored, or at least underestimated by govt.

[Chicken Chaser]

IainT said:

Indeed we spend ~£60 a week just on the commute to work. It's a significant outlay and both me and the wife have reasonable salaries.

Likewise. Nearly £250 a month just on fuel (plus insurance, service, consumables, tax) means that just to run a car every month (9 yr old focus in my case) costs me over £300

[Lunablack]

When fuel was more affordable, and the % ratio between income and fuel expenditure was more in my favour....I would regularly go for a drive up to North Wales and other places..... Once there we'd visit the shops, maybe buy a few bits n bobs, get some fish and chips, ice cream, drinks etc.....

Probably spend £20-£30 quid or so..... There would usually be a few of us in a group, so others would spend similar amounts..

Haven't been for over a year.....can't be arsed spending £50 quid on fuel, just to go for a drive..... When I can put that £50 towards something else......

In fact although the price of fuel has gone up and up, my spend has gone down and down....

Here are some accurate figures for my Jeep...... As you can see despite LPG being around 45p per litre back in 07 and around 75p per litre in 2012..... My usage has bombed

2007........ Total spend on fuel. £2429..... 5500 litres PA
2008..... £2627. 4700 litres
2009........ £2073. 3800 litres
2010......... £1790. 2700 litres
2011........ £1376. 1965. Litres
2012......... So far. £785. 1046. Litres

[JDRoest]

davepoth said:

As it stands, the high level of tax on fuel actually serves to stabilise the price at the pump, shielding families and businesses from wild price fluctuations which happen in countries with low fuel tax. If we remove that tax and put it elsewhere to balance the books, fuel consumers will be completely at the mercy of global crude oil prices which will be very bad for business.

How do you work that out? It's quite nice when fuel prices here go down and I have money to spare to spend on something nice.

Obviously I'm missing the enjoyment of visiting the UK and paying £1.40 for a litre of diesel. Next time I spend £100 to fill up in the UK, I'll think "gee, this sure helps families..."

[Lunablack]

JDRoest said:

Obviously I'm missing the enjoyment of visiting the UK and paying £1.40 for a litre of diesel. Next time I spend £100 to fill up in the UK, I'll think "gee, this sure helps families..."

Spot on mate..... I'm still running my van on diesel I bought in France in August....@ £1.15... Filled every jerry can, petrol can and other sealed receptacles I could, and brought it back with me...

[JDRoest]

Lunablack said:

Spot on mate..... I'm still running my van on diesel I bought in France in August....@ £1.15... Filled every jerry can, petrol can and other sealed receptacles I could, and brought it back with me...

I'll see your "£1.15 and jerry can" comment, and raise you - I was working near Livigno in Italy, where it was 96c per litre (78p?), filled up 50 litres of jerry cans every time I needed a fill up (totally illegal btw - hence thinking about having a second fuel tank fitted to my van for next year), and went via Luxembourg every time I went north. I timed fuel stops for cheap fill ups!

[anonymous-user]

the wider the tax base the better. everyone pays fuel tax from your drive tarmacing, benefit claiming, caravan dwelling scrote to your non-dom tax exiles. if you really want to put tax money back into the pockets of working families just lower their income tax rate accordingly.

[oyster]

martin84 said:

oyster said:

Since fuel prices are a much bigger issue in the US than they are here, I'd say big price fluctuations are actually more impacting on consumers and voters than stable, higher prices.

Define 'much bigger issue' please. What percentage of the average take home pay does the average American spend on fuelling the car? Give me numbers

It's an issue in the Presidential election - issues don't get much bigger in the US.

[hollydog]

It would have to be a massive cut on fuel prices. price of all fuel has come to a stage where people think twice on making journeys so its got to have an effect on shops pubs restaurant's. Lets face nipping to to coast for the day is not cheap any more. We all know that petrol / diesel is cheap at source.A friend has just started working in libya petrol works out at 20 ish p a litre or was that a gallon i will get back to you on that one. So we are still being ripped off for what we pay at the pump.
I been saying this for a long time reduce taxes on fuel get more people out sending money. Making every thing dear doesn't matter what ever the product over all is not good. In the end people stop buying which is whats happening now.

Something else i have not heard any one talk about is the population could it be that there is just too many people in the world .