Slashing the cost of fuel - would it help?
Discussion
Heard someone on the radio today ranting about the price of fuel and how slashing it would result in kickstarting the economy.
Certainly got me thinking. We pay something in the region of 70p on top of what it costs to refine plus the cost for the retailer to make money.
If that 70p was halved, and pressure was placed on suppliers to reduce their costs accordingly, would it mean that the economy would pick up? Householders would be spending less on fuel and more on other items, items should be cheaper due to lower transport costs and there might be an increase on the level of fuel bought (it has reduced significantly) which would limit the losses to the treasury from the tax cut.
Plausible?
Certainly got me thinking. We pay something in the region of 70p on top of what it costs to refine plus the cost for the retailer to make money.
If that 70p was halved, and pressure was placed on suppliers to reduce their costs accordingly, would it mean that the economy would pick up? Householders would be spending less on fuel and more on other items, items should be cheaper due to lower transport costs and there might be an increase on the level of fuel bought (it has reduced significantly) which would limit the losses to the treasury from the tax cut.
Plausible?
Does this then demonstrate, that we cant be green and a capitalist economy at the same time? Supply and demand drops because the government are trying to squeeze vehicles off the road by ramping up the cost of motoring? Its a knock on as it affects the businesses of garages, supply of tyres, oil and other consumables and we stop buying fuel above a critical point. Whilst they keep increasing prices upon it, they are only shooting themselves in the foot as the amount we buy falls.
It would be interesting to see government figures on spending to see where the biggest strain was, and where the largest supply was.
It would be interesting to see government figures on spending to see where the biggest strain was, and where the largest supply was.
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 £300Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff