Fuel Duty

Harroman

When fuel duty was reduced a couple of months ago it seemed to make no difference to what I was paying. In fact, prices seemed to continue to rise. I suspect that the petrol companies just pocketed the money. It seems to be an impossible thing to monitor. Therefore we should do everything to stop any of the new PM candidates making further reductions part of their promises. They should concentrate on tax reductions that we can actually see.
Thanks for reading.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/6365840/rising-fuel-prices-government-assistance-none/p1

Sandtree

Harroman said:

When fuel duty was reduced a couple of months ago it seemed to make no difference to what I was paying. In fact, prices seemed to continue to rise. I suspect that the petrol companies just pocketed the money. It seems to be an impossible thing to monitor. Therefore we should do everything to stop any of the new PM candidates making further reductions part of their promises. They should concentrate on tax reductions that we can actually see.
Thanks for reading.

Like what? VAT? You'll have the same problem that a shop can decide if to reduce its prices to reflect the lower tax, hold them steady or increase them because their wholesaler has bumped the price for the third time. 

People's salary tends to be fairly static so a reduction in income tax is more transparent but that tends to benefit the well off most and the lowest earners the least unless its not a reduction in the rate but a change of when it starts. 

Penguin_

Harroman said:

When fuel duty was reduced a couple of months ago it seemed to make no difference to what I was paying. In fact, prices seemed to continue to rise. I suspect that the petrol companies just pocketed the money. It seems to be an impossible thing to monitor. Therefore we should do everything to stop any of the new PM candidates making further reductions part of their promises. They should concentrate on tax reductions that we can actually see.
Thanks for reading.

How much profit a litre do you think a retailer makes? 

Grey_Critic

IF the receipt were to list the Price + Duty + VAT then it would be easy to see if any government tax/duty cut was passed on.

It was obvious to many of us that the cut in fuel duty would go into the retailers pockets.

According to an article I read some months ago companies such as Asda and Morrisons were making between 13 and 16 pence per litre.

I live in Huddersfield and driving into Wakefield yesterday I found a Shell station selling petrol @ £1.799 litre

Ebe_Scrooge

The fuel duty cut was passed on to the consumer, but it was more than wiped out by the increased cost of fuel - this article explains it quite nicely: https://www.bbc.co.uk/news/business-52188448

There are lots of factors at work, but probably the biggest ones are:

1.  Crude oil costs more globally as suppliers are struggling to meet demand.

2.  Crude oil is always traded in USD, so the weak Pound Sterling at the moment means you get less dollars to the pound, which further exacerbates the problem.

Sandtree

Grey_Critic said:

IF the receipt were to list the Price + Duty + VAT then it would be easy to see if any government tax/duty cut was passed on.

It was obvious to many of us that the cut in fuel duty would go into the retailers pockets.

According to an article I read some months ago companies such as Asda and Morrisons were making between 13 and 16 pence per litre.

I live in Huddersfield and driving into Wakefield yesterday I found a Shell station selling petrol @ £1.799 litre

Not really

Fuel duty is a fixed fee per L, vat is 20% of the total inc the duty and so for any price charged you can work out those three components. Take your £1.799 that is 30p VAT 53p Duty and 97p price. Pre the duty cut it would still have been 30 vat but 58p duty and 92p price. 

What you cannot tell from that is if the increase from 92p to 97p in the pre-tax price is due to the garage making 5p/L more profit or because their running costs/wholesale fuel costs have gone up 5p/L

Car_54

Ebe_Scrooge said:

The fuel duty cut was passed on to the consumer, but it was more than wiped out by the increased cost of fuel - this article explains it quite nicely: https://www.bbc.co.uk/news/business-52188448

There are lots of factors at work, but probably the biggest ones are:

1.  Crude oil costs more globally as suppliers are struggling to meet demand.

2.  Crude oil is always traded in USD, so the weak Pound Sterling at the moment means you get less dollars to the pound, which further exacerbates the problem.

Oil also has to be transported from the well to the refinery, and from refinery to pump - using expensive oil!
Refining uses lots of energy, again largely generated by oil.
It's a vicious circle.

Grey_Critic

Oil also has to be transported from the well to the refinery,

Not forgetting sending tankers round and round in circles waiting for the price to go up

jon81uk

Sandtree said:

Harroman said:

When fuel duty was reduced a couple of months ago it seemed to make no difference to what I was paying. In fact, prices seemed to continue to rise. I suspect that the petrol companies just pocketed the money. It seems to be an impossible thing to monitor. Therefore we should do everything to stop any of the new PM candidates making further reductions part of their promises. They should concentrate on tax reductions that we can actually see.
Thanks for reading.

Like what? VAT? You'll have the same problem that a shop can decide if to reduce its prices to reflect the lower tax, hold them steady or increase them because their wholesaler has bumped the price for the third time. 

People's salary tends to be fairly static so a reduction in income tax is more transparent but that tends to benefit the well off most and the lowest earners the least unless its not a reduction in the rate but a change of when it starts. 

A change in the threshold, as has happened last week is probably the fairest method of lowering taxes.

As you state VAT cuts can be absorbed by businesses, income tax changes often affect the wealthy more, but increasing the tax-free amount more seems to give more money to the less-well off.