Taxing issue of the cost of petrol
THERE is not a lot of things more satisfying than filling up your car for less than you paid last year – but are we getting a fair deal?
The world price of oil has slumped to $50 per barrel, from its peak of $140 in 2007. That’s a drop of almost two thirds but pump prices have fallen by only a quarter, so how come?
I’ll tell you how come: the British government adds 58p per litre on petrol regardless of the cost. OPEC could give oil away and you would still pay the government that amount.
The only variable in tax income is VAT, so the fall in world oil prices has cost the British government very little. They grab the same amount of tax whatever the circumstances. The only people who have suffered are the producing countries.
It won’t escape their attention that the British government is making more money taxing oil than OPEC do producing it. They will make us pay for that when the world price of oil moves upwards – wouldn’t you?
If you baked bread and sold it for 20p per loaf then discovered the local council added 50p onto the retail price you’d consider you were selling your bread too cheaply.
Why would you allow a council to make 50p clear profit for doing nothing? You’d feel exploited and so will the Russians and Saudis. So, I’m sorry to spoil the party but prepare yourself for a backlash the moment oil markets improve. And guess what? Ministers will raise their hands in frustration blaming it all on the ‘greedy’ members of OPEC.
NB: While we are on the subject of greed, can we have some significant reductions in gas and electricity prices please?
Energy companies lost no time increasing their prices when costs rose.
Wholesale gas prices have fallen by 30 per cent in the past year. It’s time to reciprocate.