Petrol to break the £1/litre mark soon

[King Cnvt]

There's nothing worse than yanking your hose and realising it is too short to reach the hole, so you end up spurting it all over the place.

[dang65]

I think the government tax on fuel is a clever cushion they've set up for when oil prices really start rising seriously. With such a high rate of tax, they'll have the option to simply reduce the tax as crude prices rise, thus allowing pump prices to stay fairly level for a while. If crude prices suddenly shot up with no slack like that then there would be big time panic buying, not just of fuel but everything else too.

I might be giving the government too many cleverness points here though.

[BoredBloke]

"I think the government tax on fuel is a clever cushion they've set up for when oil prices really start rising seriously. With such a high rate of tax, they'll have the option to simply reduce the tax as crude prices rise, thus allowing pump prices to stay fairly level for a while. If crude prices suddenly shot up with no slack like that then there would be big time panic buying, not just of fuel but everything else too.

I might be giving the government too many cleverness points here though."

Yes you are. The tax levied is high because they know that we have to pay it. Simple as that. They can dress it up in whatever green issue they want, but the simple fact is, they pile the tax on petrol because without it our cars don't work. Imagine the public transport we would have in they ring fenced all petrol duties and spent it on public transport. They won't becuase it would be self defeating. Get people to stop using their cars and a revenue stream dries up.

[dang65]

The tax levied is high because they know that we have to pay it. Simple as that. Get people to stop using their cars and a revenue stream dries up.

Would there be an advantage to the country if the government greatly reduced the tax on fuel? Drivers would have more money, and I imagine their reaction to having more money would be to buy a nicer car, because that's most important to drivers. Or they'd have more to spend on a bigger mortgage, not to buy a bigger house but to pay more for the same size house - more spare cash = higher property prices.

And of course the government would have a hell of a lot less money if fuel tax were lowered. I know they spend most of it on housing illegal immigrants and paying benefits to Eastern Europeans, but some of it goes to schools and hospitals and transport and roads and pensions and so on.

If extra cash has to be raised from somewhere then it kind of makes sense to get it from people who can obviously spare it, which is private car drivers.

[King Cnvt]

How about taxing the 10,000's of Non Domiciled millionaire/billionaires living tax-free in the tax haven of the UK, rather than the already screwed working man/woman who happens to need a car to make a journey practical?

Just a thought.

"Campaigners have been demanding the removal of rules that allow private equity firms to get tax relief on the debt they use to buy companies, as well as laws introduced by Mr Brown which allow private equity partners to pay as little as 5% tax on the bulk of their income.

"It has been reported that 112,000 individuals indicated "non-dom" status in their self-assessment returns in the tax year to April 2005 - a 74% increase on 2002's figures. Accountants have estimated that if 20% of private equity businessmen left the country if the practice ended, Britain would still be better off by £4.3bn, equivalent to more than a penny off income tax."

And yet the HMRC are more concerned with IR35 than chasing these 112,000 people living tax free in the UK.

[chicane]

Would there be an advantage to the country if the government greatly reduced the tax on fuel? Drivers would have more money...

Or would the oil companies simply push up the price of petrol in the UK to compensate? It's not like you're going to drive over to France to fill up.

[VectraMan]

Would there be an advantage to the country if the government greatly reduced the tax on fuel? Drivers would have more money, and I imagine their reaction to having more money would be to buy a nicer car, because that's most important to drivers. Or they'd have more to spend on a bigger mortgage, not to buy a bigger house but to pay more for the same size house - more spare cash = higher property prices.

Regrettably, I agree with Mr Dang.

However you could say that if tax on fuel is being used as a way to keep us all poorer and keep the economy in check, then that's the same as interest rates. From my point of view I'd much rather see higher interest rates and cheaper fuel.

[KathyWoolfe]

Part of the explanation of rising prices is it's not so much petrol is rising in value as the pound sterling decreasing in value - something akin to the US dollar. Ergo, selling your labour for pounds sterling (or US dollars) is becoming increasingly foolish.

Sterling is much stronger than the dollar - you can get about 2 dollars for every £. So apart from the taxation there is no reason why petrol should be more expensive here.
Even in Australia - which to my knowledge has to import all its oil - the petrol there is about 95c per litre - on the surface, a similar price to here except for the fact that yoiu get 2 A$ to the £ making their price half of ours

[KathyWoolfe]

I might be giving the government too many cleverness points here though.

I think so!

[_V_]

I believe our fuel is in the top 5 most expensive places to buy fuel in the world. This is purely down to us have the most heavily taxed fuel in the world.