Will the UK government allow fuel prices, over which they have a degree of control, to continue to rise?
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Fuel tax and VAT combine to make between 60% and 70% of the price at the pumps. As fuel prices go up, so does the tax revenue. Fuel prices now pose a threat to the economy with a prediction they could hit 150p per litre by the end of the Summer. Meanwhile the government is enjoying a windfall of tax revenue - the more prices rise, the more tax they collect. The oil companies are set to announce more record profits too. Fuel is not a luxury item. We can drive smaller cars, but we need to get around, and the UK public transport system is not a viable option for many outside the capital. Obviously, the motorist is outraged, but at what point does it make economic sense to reduce fuel tax (perhaps temporarily) to give families a break from spiralling cost of living, and reduce inflationary pressure.
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Answer:
Current fuel prices already pose a threat to the economy, road transportation costs obviously affect pricing on everything, combine this with a large rise in fuel costs at home and in business, and in food prices and we are in trouble. Then there is the so called credit crunch so banks are being harder on everyone and the 10p tax rate issue, and it all stacks up to a miserable life unless you're a M.P. with a big fat expense account and a disire to fill your own pockets first and foremost. 2.5% inflation is a joke and I am worse off now than ten years ago, from the scrapping of miras on this government has took,took,took and wasted all our money.
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Other answers
Its disgusting, they will not be happy until they have bled us all dry, this country has had it.
There will always be an England
We are in for a rough ride. All our necessary goods have to be transported, and needs fuel to get them to the shops. They in turn pass the increase onto us, Joe "Muggins" Public. No wonder people a moving out of this country. I am rapidly loosing my loyalty with the the country i used to be so proud of and loved. On talking to other people like myself, that also have the same sentiments too.
JOHN B
er, if you are talking about tax increases, who knows?but oil prices have risen around the world and the govt cant do anything about that, unless you want them to lower tax to make up for the fuel increase, but i guess you have to petition the govt for that! or take the bus or cycle. I am not in the capital and the transport is fine. you should try the US for public transport if you think uk is bad!
gym
Oh the Government is happy to play with our purse strings and push us to to the limit. If they want to stay in power they should be looking at reducing a few things. Doing away with 10% percent tax and reducing the 22% to 20 was a nonense. Introuducing working working tax credit was another farce.
D
Your guess is as good as the next person's - with today's governments, who knows? To have a viable public transport system, they need fuel just like the rest of the population! They are also shooting themselves in the foot by not doing something about the rise in fuel costs, right? So, they can afford the rising costs because of the tax they get from everyone else - they can afford it so why do something to change it????
Calypso
Here is the problem. The UK government (indeed few western governments, EVEN the US) have little or no control over oil prices, which have been climbing for some 18 years, but occasionally during that period, oil prices have soared enormously in a short time. The problem with tax on fuel in the UK - every government since 1979 has been elected on promises of low income tax BUT it has to fund its spending somehow, so the tax goes on VAT, beer, cigs and fuel. Over 11 years, actually only a few pennies have been added on as excise duty (the 17.5% VAT goes without saying, though this government has never increased the VAT rate) - the current problem really is the oil price. What happens if we suddenly decide to cut the tax on fuel? Say diesel came down from £1.20/litre to £1.00/litre - then the oil companies will say "if the UK government doesn't want it as tax, WE will take it as profit" and the price will go back up anyway! But rather than funding our schools and hospitals, it will fund guns for a dictator in an African oil state, or palaces for rich Arabs. How would you rather this money was spent?
Ed
Why do you think you have a right to cheap fuel? Bread prices have risen astronomically over the last 6 months, and I would suggest that is much more of an essential item, but you don't get as many protests about that. The question to ask is 'Why is the price of oil rising?' The answer to that is simple, we are running out of oil. OK not today or tomorrow, but certainly in the next 40 years. Most oil analysts agree we have past peak production. I.E. We have used more oil than there is left in the ground, and as with any scarcity the price inevitably rises. Governments have no control over this. The other thing to consider is that higher oil prices bring in other streams of oil, thus making reserves last longer. If oil is $80 per barrel, but because of conditions costs $100 to extract it is uneconomical. At $150 per barrel it is economical to extract and gives us more reserves. The recent discovery of a large oil field of the coast of Brazil might stabilise prices for a bit, but the cost of fuel, especially with so much demand, will only go up. This is simple economics and not the fault of government. OK so say they cut the tax and give you cheaper fuel, and you use the roads, what if you crash, and there is no money for an ambulance or the fire brigade to cut you out? Or the roads become undrivable because there is no money to repair them? You can't have it both ways. Edit Brownbug I am in Liverpool High taxation has actually made the rise in fuel more manageable. The U.S. has low fuel taxation, and there was protests about 5 years ago when it went through $1.00 per gallon. It is now $3.50 in the U.S.and still rising. Although our prices are high they have not gone up over 350% in under 5 years.
Corneilius
I completely agree - I had no idea that from a price of 108p per litre, the oil companies only make 8.8p, and that, as you mentioned, more than two thirds of the cost goes straight to No 11 Downing Street. We bought our car in Sept last year, at which point diesel was 98p per litre. It has now increased by almost 20% to 119p in just over 6 months. Considering the credit crunch that most families are facing in the UK with the spiralling cost of living, the government should take emergency action and reduce the duty paidon oil IMMEDIATELY. EDIT: Neil, it sounds like you;re in the US. THe reality in the UK is that at the pumps, 50% of what we pay goes directly back to the government in fueld duty, and on top of that, a further 18% is Value Added Tax. These steep taxes have nothing to do with the actual cost of a carrel of oil, it is just the Labour government here once again bleeding its citizens dry.
brownbug78
The government can only control taxes and can you really see Brown/Darling reduction taxation when they are in such a mess.
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