Motorist's Are Being 'Legally' Mugged

Discussion in 'Current Affairs' started by Tartan_Army_Sailor, Mar 16, 2010.

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  1. Despite oil prices being less than half of their record high, which saw petrol prices reach £1.20 per litre in July 08, prices are set to reach that price again.

    The Treasury is set to add 3p per litre to the price of petrol from 1 April.

    Link
     
  2. Have I missed something? The Treasury is going to add 3p to the price of petrol but it is the Oil Companies who are "mugging the motorist"!

    60% of the cost of a litre of petrol is currently taken by the Treasury in the form of Duty and VAT
    30% is taken by the oil companies to pay for the oil, transport and processing costs
    10% pays for delivering processed fuel to petrol stations (including profits for station operators)

    I am sure the oil companies are making profits on the petrol they supply but the mugging is being done by HMG!
     
  3. sgtpepperband

    sgtpepperband War Hero Moderator Book Reviewer

    Personally I believe that the only people who are actually being "legally mugged" via excessive fuel prices are those that have to rely on motor transport for their livelihoods (haulage firms, those who live in remote areas or are immobile, etc.). The rest of us - those who 'choose' to make unnecessary journeys, in particular those in towns and cities, which can be done on foot or via alternative means - have only themselves to blame.

    Apart from those mentioned above, having a motor vehicle is a lifestyle choice, rather than a right; do you really need to make that journey to the supermarket on the outskirts of town for the monthly shop, or could you get your provisions on a daily basis on the way home from work? And do you need to drive the couple of miles to work, or could you pop in your iPod and walk it, feeling fitter and more relaxed because you've not been stuck in a traffic jam for the last 20 minutes? Take the bus, catch a train, and maybe even engage in conversation with other members of society that you might not normal meet if you had been sat in your airtight vehicular bubble...

    Fossil fuel is a quantifiable resource; those that invest money into the production and distribution of it know this, and thus control the output (and price) accordingly - when their is a dearth of the stuff, the price comes down. When it is in limited supply, the price increases, as with any precious commodity. Simple business strategy, and one which can be helped by the consumer by rationing their (ab)use of it. The only language that the fuel companies understand is money, so if the consumer made a constructive decision to use alternative transport options and stopped buying the product then the companies will consider alternative sales techniques to attract the customer back. Simples!
     
  4. Agreed SPB.

    But can someone please explain to me how there can be such a differnece in prices for the same product. Whilst travelling around this weekend I saw Diesel on sale ranging between 110.9 right up to 122.9 per litre. How is this fair on some drivers, who live in the areas where the cost is so high?

    SM

    :?
     
  5. Fair comment in principle SPB but with 72 pence out of the expected cost going to the government, if they started to see more people using buses, trains, bicylces or Shanks' pony, with attendant revenue from tax plunging, the most likely course of action for them would be to bump up tax and other duty to compensate for the loss to the Treasury coffers. Just my opinion, and I am a cynic at the best of times.
     
  6. In the USA I am paying $2.30 a US gallon for premium gas [1 pound and 50 pences].

    This includes:-

    Oil-company base costs + profit

    Transportation costs [refinery to pump] + profit

    Retailer costs + profit

    The price of a barrel of oil costs the same in UK as it does in the US. Refining costs are similar.

    Although a US gallon is slightly smaller than an Imperial gallon the real cause for the price differential is the amount of taxes that the UK consumer has allowed the gubbermint to impose.


    The UK motorist is an easy target and Darling / Cyclops will take every penny that they can squeeze.

    EDITED TO ADD:-

    1 US Gallon = 3.8 litres [rounded]

    1 Imp Gallon = 4.55 litres [rounded]

    US cost per liter = 59 cents [39 pence]

    UK cost per litre = 120 pence [180 cents]

    'Kinnel!!

    RM
     
  7. The OP’s ‘Mugging’ is NOT restricted to the average John Doe motorist,

    So, Sgt Peppa, your rationale for avoiding this ‘mugging’ is a little too cosy and rosy.

    Perhaps some consumers may be able to walk to their local shops to purchase their bare necessities of life.
    Well done those who can. (Any money that they may ‘save’ will surely be eroded by the inflationary arisings anyway)

    But, as the cost of transporting those bare necessities to the point of sale increases,
    so the cost to the end-user/ purchaser will also increase;
    thus this “mugging†is not merely restricted to your ‘extravagant’ personal vehicle user.


    You have also ignored the further point alluded to made by the TAS & BS - Apart from the scheduled Treasury increase of 3p per litre from 1st April, any fuel increase imposed by the producers will inevitably result in a ‘windfall’ tax to the treasury arising from the subsequent increase in VAT revenues.


    Regarding “out of town supermarket shopping†versus “smaller, local tradersâ€:
    Which provides the better value for the shopper? (No answer needed) and,
    Whose relative bulk transport costs are also cheaper? (Again, no answer needed.)



    Simples? Yes, if you completely ignore the above points.
     
  8. I think everyone pays no matter what. Public transport pass on the cost of rising fuel and it's a rare person can conduct all their business by foot. In addition, certainly where I live, few journeys can be made by public transport alone - the best most can hope for is park and ride train or bus parks.

    Taking my daily commute for an example it's only 15 miles but to do it by public transport involves a bus, train and 20 mins walk or instead of the bus part, a 50 min walk, 20 min train and 20 min walk. That's around 1.5 to 2 hours on average daily, plus season tickets (even for just the train) costing more than the petrol involved in 45 mins in a car for the same journey. So the saving is more than just money - it's time, and two plus hours of it, every day - not counting the regular cancellation or delay of services. I'm sure I'm not alone in that kind of rational use of private motor transport. I cut down even further by using a motorbike most days and only using a car when I have a good reason not to take the bike.

    I must say tho, where's the riots? Last time prices spiked like this there was uproar.
     
  9. sgtpepperband

    sgtpepperband War Hero Moderator Book Reviewer

    I am not going to contradict the above contrary comments, and I am not entirely in disagreement with any of you. My post was a point of view, 'tis all. I am not an economist, a tax consultant or an eco-warrior. Just someone who tries my best to minimise my carbon footprint by not making unnecessary journeys. If the actions of one are copied by many, something good can come of it. And given the fragility of the Earth's resources, I think there is a much bigger picture to paint, other than the effect on our pocket... :oops:
     
  10. On further reflection:

    1. The original headline was misleading/wrong - The private Motorist is but one casualty among the many users of Mechanised Transport.


    2. Sgt Peppa’s fine lesson on fossil fuel supply/demand has deflected attention from the final line of the original article:



    <<……the weak pound was the main reason why prices had risen.>>



    And we all know where the responsibility for that situation lies……..
     
  11. Another reason that the politicians will use for cancelling the carriers; we are reducing our carbon footprint :wink:

    As for the weak pound being responsible - this does not compute.
     
  12. sgtpepperband

    sgtpepperband War Hero Moderator Book Reviewer

  13. Bergen, from the OP’s original Link
    http://www.telegraph.co.uk/motoring...tre-as-motorists-mugged-by-oil-companies.html


    <<Chris Hunt, at the UK Petrol Industry Association, which represents oil refiners, said that it was "nonsense" for anyone to blame oil companies for the high price of petrol.
    "Back in 1974 there were 16 refineries and 20,000 service stations in Britain. There are now 8 refineries and 9,000 petrol stations. If we were profiteering, why would all these be shutting down?"
    He said the weak pound was the main reason why prices had risen. >>

    This original Daily Telegraph article has now attracted over 110 comments, most of them sensible, and some reinforce Sgt Peppa’s AA quoted ‘Low refinery capacity’ as a major factor, too


    Whatever the root cause this sad but hot topic is likely to cause us all in UK considerable grief and may just be just the last straw to plunge our weak ‘recovery’ into a (deeper) recession MkII.


    The pessimists will be on standby for the IMF to step in pretty soon after our Gen. Election (whoever wins).
     
  14. Despite all the wonderfull points raised above there is no doubt that Gordon and his lack Darling have conspired to raise the costs of road fuel and particularly diesel in the UK to levels which continue to make it difficult for UK transport operations to operate both profitably and legally. European trucks are coming over to the UK with full tanks of relatively cheap diesel and undecutting UK contractors.

    One might suggest that Gordon has been funding dodgy climate change science to justify punitive rises in fuel tax for the UK whilst other countries do not.

    edited to add, taxes that he has subsequently squandered trying to buy votes which has resulted in the pound falling in value by 25% even against countries where the credit crunch was supposedly hitting harder.
     
  15. Crude oil is generally priced (and bought/sold) in US dollars. A weakening pound against the dollar means we get fewer $'s for each £1, therefore we get less oil for £1. Buying the same amount of oil therefore costs more £'s (i.e. price increases).

    Not much the government can do directly to change this other than to slash fuel duty, but all this would do is cut tax revenue at a time when we can't afford to. Indirectly it is entirely responsible however, as it has allowed the national debt to balloon which is causing the uncertainty in the markets that is pushing down the value of the pound. The best course of action would then be to dramtically cut the budget deficit, something the current government don't seem to have the cajones to do anytime soon.

    Oh and expect inflation to start rising over the course of the year with the subsequent increase in interest rates (you saw it here first!). As usual, a Labour government will leave this country with a massive deficit, stagnant economic growth and rising inflation - well done Mr Brown.
     
  16. It still doesn't compute, any drop in the purchasing power of sterling for benchmark crude is more than offset by the $ per barrel price which is not particularly high at the moment; [ Bonny Light is hovering in the $80bbl territory]. Add to this the fact that present inventory was bought some time ago and the present price hike looks decidedly dodgy.

    Strange how poor economic factors seem to have an immediate upward effect on oil-prices, but good economic news [if there is such a thing in Cyclop's Britain Plc] never seems to bring UK petrol prices down.

    RM
     
  17. Sorry Bergen the price of oil has been pretty stable for the last years or so, but as a result of Mr Browns skill in managing our economy the value of the pound has fallen by some 25% and is still falling. On Browns instructions th chancellor has continued to hike fuel duties, so the current price is not that surprising
     
  18. When the government reduced VAT to 15% at the beginning of 2009 they increased the Fuel Duty to make up the lost VAT.When VAT returned to 17.5% on the 1st January the Fuel Duty previously added was not deducted.Are we being mugged?Of course we are.We are so far up shit creek that it wouldn't surprise me if they put the Fuel Duty up again in the forthcoming budget announcement.
     
  19. Six months ago the price of oil was $66 bbl.

    Six months ago sterling $1.66

    Six months ago petrol was 110 pence per litre

    Yesterday West Texas Intermediate was trading at $81.

    Sterling was $1.53

    Petrol is approaching 120 pence per litre

    Is the dollar/sterling rate a factor in the rising price of petrol in UK? Absolutely.

    Is the Dollar / Sterling exchange rate responsible for the latest increases in UK pump prices? Doubtful.

    A bigger factor is the wholesale price of petrol [as opposed to the price of crude] and Chinese petrol consumption which has been growing at an annual 26% [and of course keeping wholesale prices high by absorbing spare capacity].

    The UK economy has a way to go yet before it bottoms out and Darling and Cyclops are finding out that you can't plug the tax gaps by over-taxing.

    RM
     
  20. Bergen you cannot deny, that if my MP had not cocked up our economy so much that the pound has beed devalued 25% then we would be paying less for our fuel. If you add to that the extra tax already added to fuel over the last 12 months a very significant part of the extra we pay today is down to my MP. Yes there are other factors, but they would be having less impact if the pound had not been devalued and the tax raised. If one adds to this the fact that the poodle Darling will raise fuel duty again in the budget you can perhaps understan why some of are ever so slightly miffed.

    Finally I must admit that I am most surprised to see you rushing to the aid of one of your Iraqi invasion chums.
     

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