Rising Fuel Prices & Government Assistance (none)

OrwellianBabe

The BBC website today had an interesting article entitled ‘How are people coping with the soaring cost of living?’ in which it described a myriad of situations that have contributed to today’s increasing prices. 

As I scrolled down this lengthy article I stumbled across a feature headed ‘What makes up the cost of a litre of unleaded’ and wondered how long before I and others would have to ditch our cars in favour of ‘Shank’s Pony’ because we’d no longer be able to afford fuel. 

Quote taken from this BBC feature   "The fuel trade’s failure to cut prices this weekend will be nothing less than shameful," an AA spokesman says. It comes after the government raised concerns that petrol retailers were not passing on the recent cut in fuel duty. 

It made me laugh looking at the breakdown of the cost of a litre of unleaded provided which goes something like this:   Cost of petrol to supplier 45%  Cost of Fuel Duty 29%  Cost of VAT 17%  Cost of Biofuel content 7%  Retailers Profit 2%   Supply & Delivery 1%.  (which weirdly adds up to more than 100%) 

So whilst the Government are concerned that retailers are not passing on lower prices or fuel duty cuts, it’s a delicious irony that Fuel Duty & VAT together make up 46% of the cost of a litre, ie higher than the cost of petrol to suppliers. 

If the Government really wanted to help ease the burden then perhaps a reduction in VAT or a legislative change to mandate fuel duty reductions being passed on would be the way forward.  What does everyone else feel?

diystarter7

Very true and don't forget the government is making masses more money from drilling for oil as PPB is at highs.

Just shows the usal with this lot and the others, 'blame someone else' just like good, old Boris does.

When it's going well, they will take credit but when not so well, they blame others and call it a "world event."

Grumpy_chap

The OP may be interested in this thread:
https://forums.moneysavingexpert.com/discussion/6365128/petrol-diesel-price-increases/p1

If the Government subsidise petrol cost, what tax should they put up or what other expenditure should they cut to pay for it?

OrwellianBabe

Good point Grumpy Chap but I'm guessing that'll be the same tax they'll put up to pay for all the other handouts the Gov are giving to help with cost of living increases.  We all know the taxpayer eventually ends up footing every bill.  I don't object to paying additional fuel duty if the cash is going to be ringfenced for the upkeep or improvements to roads/footpaths or public highways and byways.  Anyone know what fuel duty collected is actually used for or does it go into the general coffers to spend as Governments see fit?  Loved that other thread.  Thanks

Grumpy_chap

OrwellianBabe said:

Anyone know what fuel duty collected is actually used for or does it go into the general coffers to spend as Governments see fit?  

Yes, it goes into the general coffers to spend as Governments see fit.

sevenhills

OrwellianBabe said:

So whilst the Government are concerned that retailers are not passing on lower prices or fuel duty cuts, it’s a delicious irony that Fuel Duty & VAT together make up 46% of the cost of a litre, ie higher than the cost of petrol to suppliers. 

I find it strange that the BBC and most of the media are repeating this government claim.
They are suggesting that petrol stations are committing fuel duty/VAT fraud.

Grey_Critic

Claims that the government cut in fuel dity are not being passed on are all well and good but it would help if the invoice we get actually showed the various costs - not just in terms of percentages but cash.

I get the impression that we are being intentionally misled.

user1977

Grumpy_chap said:

OrwellianBabe said:

Anyone know what fuel duty collected is actually used for or does it go into the general coffers to spend as Governments see fit?  

Yes, it goes into the general coffers to spend as Governments see fit.

Like just about every other tax. Would be absurdly restrictive to start tying together particular taxes and expenditure.

What should the duty on my bottle of wine be spent on? Liver transplants?

Car_54

user1977 said:

Grumpy_chap said:

OrwellianBabe said:

Anyone know what fuel duty collected is actually used for or does it go into the general coffers to spend as Governments see fit?  

Yes, it goes into the general coffers to spend as Governments see fit.

Like just about every other tax. Would be absurdly restrictive to start tying together particular taxes and expenditure.

What should the duty on my bottle of wine be spent on? Liver transplants?

Quite. The only notable example of where this hypothecation was attempted was the Road Fund, which was abandoned as pointless almost a century ago. 

But many people still seem to think it’s in force ….

mark1959

user1977 said:

Grumpy_chap said:

OrwellianBabe said:

Anyone know what fuel duty collected is actually used for or does it go into the general coffers to spend as Governments see fit?  

Yes, it goes into the general coffers to spend as Governments see fit.

Like just about every other tax. Would be absurdly restrictive to start tying together particular taxes and expenditure.

What should the duty on my bottle of wine be spent on? Liver transplants?

A nice bit of British cheese.

[Deleted User]

The real reason that fuel is now so expensive is that the Pound has fallen due to the combined economic disasters of brexit and the COVID response.

2008 - $144/barrel, 120p at the pump.
2022 -  $113/barrel, 186p at the pump.