Scary Stuff.... Oil currently at $106.95

Rochdale_Pioneers

leveller2911 wrote: »

With regards to the Oil price why are we not giving Government more flack over the high tax on Petrol?...

Why should we? Its not tax causing prices to ramp up, its the exchange rate and the cost of the raw material. In countries where they pay a little less tax (and it is only a little), the exchange rate and material price are more of what they pay at pump so the swings are higher. Why do you think the UK was so low down the EU league of unleaded prices? To listen to the Daily Hurrah for the Blackshirts you'd think pump prices are 100% down to tax and we pay more than anyone. It isn't and we don't.

Tax is clearly a large chunk of the pump price, and you could rebase the tax downwards. Lets say duty was a whopping 30p less. Pump prices would have soared from that level way up past £1 and we'd all be up in arms. You budget based on what you pay - are Americans all saying "well I don't mind that gas prices have risen 30% because at least I'm not in the UK".....?

Rochdale_Pioneers

PeterZ wrote: »

As for the high tax on petrol, dont forget that labour left us all with a huge debt. Which other tax would you like to see increased to recover the lost revenue?

Huge as in "smaller than virtually all of our competitors in the G8" or huge as in "smaller than most of the post war period"? Perhaps you meant "deficit"?

Perhaps the lost tax revenue could be recovered by actually generating tax revenues? But then again a growing economy doesn't enable the government to create that large pliable pool of desperate unemployed people for their friends in business to exploit again like in the good times of the 1980s.

Procrastinator333

Rochdale_Pioneers wrote: »

Why should we? Its not tax causing prices to ramp up, its the exchange rate and the cost of the raw material. In countries where they pay a little less tax (and it is only a little), the exchange rate and material price are more of what they pay at pump so the swings are higher. Why do you think the UK was so low down the EU league of unleaded prices? To listen to the Daily Hurrah for the Blackshirts you'd think pump prices are 100% down to tax and we pay more than anyone. It isn't and we don't.

Tax is clearly a large chunk of the pump price, and you could rebase the tax downwards. Lets say duty was a whopping 30p less. Pump prices would have soared from that level way up past £1 and we'd all be up in arms. You budget based on what you pay - are Americans all saying "well I don't mind that gas prices have risen 30% because at least I'm not in the UK".....?

Not completely true. The Fuel duty element of the price has gone up 2 p since 1st April 2010. Plus they also quite checkily apply VAT to the fuel duty, so it is actually amplified to 2.4p.

VAT going from 17.5% to 20% had the bigger impact than this though as it is applied to the whole lot, so another 3 ish pence. Whenever the base cost goes up, it is amplified by 20% because of VAT. So a fair whack of the rise over the last 12 months is tax related.

Also, we pay more than most...

http://www.theaa.com/onlinenews/allaboutcars/fuel/2011/february2011.pdf

worldtraveller

The chief executive of Saudi Arabia's state-run oil giant says it has stepped in to compensate for an export shortfall stemming from the unrest in Libya.

Saudi Aramco's Khalid Al Falih declined on Monday to specify how much additional oil Saudi Arabia -- the de facto leader of the Organization of the Petroleum Exporting Countries -- has pumped into the market.

Libya produces about 1.6 million barrels per day, and exports much of that crude to Europe. But the fighting that has gripped the nation as Moammar Gadhafi struggles to hold onto power has resulted in an at least 50 percent drop in production.

Saudi Arabia and other OPEC members have said they are ready to step in to compensate for any Libyan export losses.

AP

JasonLVC

Procrastinator333 wrote: »

Not completely true. The Fuel duty element of the price has gone up 2 p since 1st April 2010. Plus they also quite checkily apply VAT to the fuel duty, so it is actually amplified to 2.4p.

VAT going from 17.5% to 20% had the bigger impact than this though as it is applied to the whole lot, so another 3 ish pence. Whenever the base cost goes up, it is amplified by 20% because of VAT. So a fair whack of the rise over the last 12 months is tax related.

Also, we pay more than most...

http://www.theaa.com/onlinenews/allaboutcars/fuel/2011/february2011.pdf

Ed Balls commented last week that the government shouyld reduce the rate of VAT on petrol/diesel to 17.5%.
http://www.independent.co.uk/news/uk/politics/ed-balls-calls-for-petrol-vat-abolition-2227049.html

Having worked in Treasury for so many years under Brown and now as Shadow Chancellor, you'd think that he should know by now that VAT is a European tax and the UK cannot just 'reduce VAT' on individual items as it sees fit without all member state approval which could take years.

Still, makes for a good soundbite but in reality all it is is yet another politician (of any party) making statements that appeal to the common person but has absolutely zero chance of ever happening - still, makes Ed look "tough" I suppose.

The government can cut fuel duty (and probably will in the Budget in March) without any permission from the EU (within reason).

Graham_Devon

JasonLVC wrote: »

Ed Balls commented last week that the government shouyld reduce the rate of VAT on petrol/diesel to 17.5%.
http://www.independent.co.uk/news/uk/politics/ed-balls-calls-for-petrol-vat-abolition-2227049.html

Having worked in Treasury for so many years under Brown and now as Shadow Chancellor, you'd think that he should know by now that VAT is a European tax and the UK cannot just 'reduce VAT' on individual items as it sees fit without all member state approval which could take years.

Still, makes for a good soundbite but in reality all it is is yet another politician (of any party) making statements that appeal to the common person but has absolutely zero chance of ever happening - still, makes Ed look "tough" I suppose.

The government can cut fuel duty (and probably will in the Budget in March) without any permission from the EU (within reason).

I heard someone question him on that exact item.

He referred not to cutting the actual VAT, but removing some duty to make up for the VAT gain.

He did describe it, and promote it as cutting the VAT, but apparently that's not what he actually said. Everyone, from Ed to the Presenter was a bit confused in the end, what with the whole "thats not what I meant, but it's what I said" thing.

Dunno why he didn't just say "cut fuel duty" from the start. I assume theres some reason he didn't want to go down that road.

Wheezy_2

JasonLVC wrote: »

Having worked in Treasury for so many years under Brown and now as Shadow Chancellor, you'd think that he should know by now that VAT is a European tax and the UK cannot just 'reduce VAT' on individual items as it sees fit without all member state approval which could take years.

I don't think that's correct. There is a European framework, yes, but member states do have flexibility in setting their VAT rates.
http://en.wikipedia.org/wiki/Value_added_tax#European_Union

This Directive sets out the basic framework for EU VAT, but does allow Member States some degree of flexibility in implementation of VAT legislation. For example different rates of VAT are allowed in different EU member states

Then again, I'm not a VAT expert

JasonLVC

Wheezy wrote: »

I don't think that's correct. There is a European framework, yes, but member states do have flexibility in setting their VAT rates.

There is some flexibility but it requires all member state approval for something as radical as charging a different rate of VAT on something and I can't see Germany or Italy agreeing to let the UK charge less for fuel than they do and even if they did, it'd take years to negotiate (and cut deals with).

We can set what % VAT will be, but even then the EU law sets a minimum and a maximum for VAT, hence we cannot go lower than 5% for domestic fuel, even if we wanted to.

JasonLVC

Graham_Devon wrote: »

I heard someone question him on that exact item.

He referred not to cutting the actual VAT, but removing some duty to make up for the VAT gain.

He did describe it, and promote it as cutting the VAT, but apparently that's not what he actually said. Everyone, from Ed to the Presenter was a bit confused in the end, what with the whole "thats not what I meant, but it's what I said" thing.

Dunno why he didn't just say "cut fuel duty" from the start. I assume theres some reason he didn't want to go down that road.

I didn't see the interview, just the news article and I took it at face value (as everyone else would who reads it).

He clearly states the Tories should cut VAT on petrol, something the Tories couldn't do with the best will in the world.

I can only assume the statement was to make a promise he knows he could never keep but seeing as he's not in control it doesn't matter and to the uneducated, it would look like there was another option but the nasty Tories didn't take it.

Reducing the duty to offset the VAT increase is not a bad idea as it still results in extra cash for the Treasury (just slightly less) but this close to a Budget, who's to say that isn't what Osbourne plans anyway?

Graham_Devon

JasonLVC wrote: »

I didn't see the interview, just the news article and I took it at face value (as everyone else would who reads it).

He clearly states the Tories should cut VAT on petrol, something the Tories couldn't do with the best will in the world.

I can only assume the statement was to make a promise he knows he could never keep but seeing as he's not in control it doesn't matter and to the uneducated, it would look like there was another option but the nasty Tories didn't take it.

Reducing the duty to offset the VAT increase is not a bad idea as it still results in extra cash for the Treasury (just slightly less) but this close to a Budget, who's to say that isn't what Osbourne plans anyway?

Yep that's how he described it in an interview. It was when questioned on how this is possible that he started confusing everyone, including himself.