Wednesday 14th September 2005

Fuel protests fizzle out

UK chancellor fiddles as Europe cuts taxes

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Where do we put the '1'?

The UK Government has taken a pasting in the media recently over the cost of fuel, as premium fuels such as Shell Optimax are now routinely found at over £1/litre. A number of US States and other European countries have reduced or suspended fuel duties on all or some types of oil-derived fuels.

The UK has done nothing, as chancellor Gordon Brown yesterday ruled out any changes in policy at a speech to the Trade Union Congress speech in Brighton. He said that fuel duty is a smaller proportion of petrol prices than it was at the time of the last fuel protests, in 2000. He also urged oil-producing countries to step up production and to use their huge profits from high-priced oil sales to invest in new production and refining capacity. He is, however, expected to continue the freeze on fuel duty in his forthcoming pre-Budget report.

As a result of this inaction, we could see another wave of fuel price protests, although the first of the three days of planned protests -- today -- has in fact seen little action. At Shell's distribution centre in Jarrow this morning, for instance, there were only about a dozen protestors, and all was quiet at its Avonmouth depot. The CBI reckoned that people recognise that this is to an extent at least a worldwide issue.

However, that hasn't stopped motorists causing shortages by over-buying at the pumps.

Meanwhile, the Association of British Drivers (ABD) has today highlighted a simple measure that the Government can take to reduce pump prices and avoid the disruption of further blockades, and that's to stop the outrageous practice of charging a tax on a tax.

The retail price charged to motorists for fuel is arrived at by taking the cost of the fuel itself, adding fuel duty -- and then adding VAT to both the fuel cost and duty amount. This means that one tax, VAT, is charged on another tax, fuel duty.

ABD fuel tax spokesman Tony Vickers said: "8.24p in every litre is VAT paid on fuel tax - a tax on a tax. The government could reduce pump prices by 8.24p per litre simply by ending this practice."

At the very least, this will solve the problem that smaller garages are finding: they've nowhere to put the extra numeral on their signs as prices lurch over a pound a litre.

[Gixer]

That makes a change our Gov not doing anything apart from making more money in the form of tax.

I was hoping for a repeat of the previous protest. As a field engineer it would have hit me hard but they would have had my full support again. Everything about this country is going down the toilet. I can't wait to leave.