Metropol

The fuel duty charged was reduced by 5p a litre as of 6pm but if a retailer charged the same amount as before 6pm they would just be able to pocket the extra.

scottishtv wrote: Wed 23 Mar, 2022 18.20 A lot being made of the 5p reduction in fuel duty on the six o'clock news tonight, which was due to take effect at 6pm.

Are petrol stations obliged to change their prices at all, or at exactly 6pm? Or is it all an exercise in perception and spin?

Fuel duty is paid at wholesale not at retail. Therefore it will only be new stock with duty paid at the new rate. What it does highlight though is a question which needs to be asked - how far in advance is fuel being purchased at wholesale? If say 1 month before then the Ukraine war shouldn't have increased forecourt prices at all yet. If on the other hand it's much more of a just in time thing and stock is being bought only a day or so before supply, then equally it shouldn't take more than a day or so to see the effect of the fuel duty drop at the pumps and/or a reduction in oil prices.

It is all ultimately smoke & mirrors though. There is nothing compelling forecourts to pass any savings on. Indeed, the RAC estimates that fuel should have dropped back to pre-autumn rates during January as the price of oil fell but it didn't. Meanwhile Asda have announced that would drop fuel by 6p / litre with immediate effect, even though they will already have paid the old rate on the duty for the stock they're selling today. I imagine other supermarkets will quickly follow.

Ultimately though it's still far too little. Even if the duty allows for drops of 5-6p/litre with no other loss of margin for the retailer that only puts things back to where they were 2 weeks ago. The war may have added as much as 20p onto a litre but even before that we were still seeing prices which had inflated 30p from where they were a year ago. To get back to the forecourt prices we have a year ago (indeed, much less than a year ago actually) we need fuel to drop by somewhere between 40 and 50p/litre at the pumps.

Right now we need a suspension of VAT on fuel, a further cut of fuel duty and the suspension of all green taxes and net-zero eco-warrior type programmes which we cannot currently afford. But it shouldn't all be cuts to direct taxation, the fuel industry does need tighter regulation and compulsion to not be able to profit from cuts in duty, as well as limits on margins. The wholesale cost of fuel may well have been the driving factor that caused these astronomical prices rises, but it hasn't stopped oil companies announcing record profits.

I'm not normally in favour of interfering with the free market, but right now the only thing which will significantly de-escalate the cost of living crisis is bringing fuel prices down, and given how much they need to come down by and the timeframe involved, it needs to be drastic action.

cwathen wrote: Wed 23 Mar, 2022 21.48 Right now we need a suspension of VAT on fuel, a further cut of fuel duty and the suspension of all green taxes and net-zero eco-warrior type programmes which we cannot currently afford.

Hard disagree. I'd like my children to have a hospitable planet to live on, which we won't have if we keep on making it cheaper to burn fossil fuels. Where's the investment in better home insulation, active travel, and public transport?

thegeek wrote: Thu 24 Mar, 2022 13.31

cwathen wrote: Wed 23 Mar, 2022 21.48 Right now we need a suspension of VAT on fuel, a further cut of fuel duty and the suspension of all green taxes and net-zero eco-warrior type programmes which we cannot currently afford.

Hard disagree. I'd like my children to have a hospitable planet to live on, which we won't have if we keep on making it cheaper to burn fossil fuels. Where's the investment in better home insulation, active travel, and public transport?

I wouldn't disagree on the need to tackle climate change, but rather more practically concerns about childrens' future being damaged due to climate change is all rather academic if some of them might not have a present.

We are at looking down the barrel of petrol crashing through £2 / litre on forecourts, domestic energy bills (particularly gas) at risk of doubling, commercial energy bills more than doubling and the knock on effect is an increase in the cost of everything. As of next week, just as Sunak bigs up his pitiful 5p/litre duty cut, he is about to ban the haulage industry from using red diesel to power the diesel generators on the refrigerated wagons which deliver your food. This isn't good to make them any greener, it just means the hauliers will have to use diesel bought at commercial rates for this purpose, seeing the cost of operating the refrigeration double overnight. That's going straight onto your food prices.

It may well be possible to tighten belts if it were only a matter of increases to electricity, or gas, or road fuel, or food, or tax, or inflation which pushes up prices for renters, or interest rate rises which pushes up mortgage payments. But we are looking at all of it hitting at once and hitting hard.

This sort of increase is not just harming the poorest in society, even people well into middle incomes are going to feel the pinch on this. And for some people 'pinch' might mean destitution. It may mean death.

At present, we need dramatic intervention to reduce fuel prices significantly, now. From where I'm standing, that means suspending green levies and also being willing to frankly, be less green in order to achieve that goal.

Not forever, but just until the energy market stabilises and cost prices drop. That may well be kicking the can down the road, but from where I'm standing it's a can that needs to be kicked.

cwathen wrote: Thu 24 Mar, 2022 14.30

thegeek wrote: Thu 24 Mar, 2022 13.31

cwathen wrote: Wed 23 Mar, 2022 21.48 Right now we need a suspension of VAT on fuel, a further cut of fuel duty and the suspension of all green taxes and net-zero eco-warrior type programmes which we cannot currently afford.

Hard disagree. I'd like my children to have a hospitable planet to live on, which we won't have if we keep on making it cheaper to burn fossil fuels. Where's the investment in better home insulation, active travel, and public transport?

I wouldn't disagree on the need to tackle climate change, but rather more practically concerns about childrens' future being damaged due to climate change is all rather academic if some of them might not have a present.

...
Not forever, but just until the energy market stabilises and cost prices drop. That may well be kicking the can down the road, but from where I'm standing it's a can that needs to be kicked.

At the moment, buying Russian gas and oil to keep the price down is costing Ukrainian children their present. There's an argument to be made in terms of Shale gas given the bulk of our infrastructure is gas based, but even that is not from a running start.

If we don't invest in the green alternatives now, then when? They don't appear overnight. It's just dragging out the inevitable because today is always more important.

I find it strange that someone thinks it's a good idea to stop investment in greener technology.

Jonwo wrote: Thu 24 Mar, 2022 16.56 I find it strange that someone thinks it's a good idea to stop investment in greener technology.

I would suggest our delay at investing in more renewable sources is one reason we are so exposed now.

Pete wrote:At the moment, buying Russian gas and oil to keep the price down is costing Ukrainian children their present.

I'm not saying we should buy Russian gas and oil to keep the price down. It is exactly right that we cut it off for the reasons you say. What I am saying is that we cannot have massive increases in the cost of oil & gas as a result and then supply that under the same taxation system causing massive increases to the end user as they get hit twice by both paying more for the raw product and then paying more tax on that more expensive product. Governments must be willing to restructure how fuel is taxed (even if only temporarily) in order to shield the end users from such stark price increases in order to prevent the kind of cost of living crisis and potential destitution many now face.

For unleaded, even with Sunak's pitiful duty reduction there is still 53p / litre in fuel duty, then most retailers are adding a percentage-based margin which hasn't gone down and therefore makes more expensive petrol more profitable, then there is still 20% VAT on top which just as with retailer margin, creates a situation where consumers are hit twice as more expensive fuel automatically attracts more VAT than the same amount of cheaper fuel would. In this situation, to bring the cost of living crisis under control they must be willing to remove VAT and cut fuel duty further. If that removes too much from the exchequer then they need to temporarily suspend taxpayer-funded green schemes to balance the books because we can't afford them. That was my point.

Pete wrote:If we don't invest in the green alternatives now, then when?

When, if that investment is funded by taxes at the point of supply, this can be done without petrol being at risk of costing £2 / litre and domestic energy bills being at risk of doubling within a year.

Jonwo wrote:I find it strange that someone thinks it's a good idea to stop investment in greener technology.

Not at all, just that now isn't a good time to be using taxes at the point of supply of fuel to fund that investment, or particularly worrying about burning fossil fuels to generate power if that will stop people from freezing to death when the winter comes. Against the backdrop of what is happening, major oil companies have just posted historical profits. I've no objection to windfall taxing them and using that for greener investment.

And frankly the reason there can be resistance to going green is not because of a lack of a wish to do so, it's because we're going about it the wrong way. With any complex transition from one way of working to another the order is clear. A) Identify the problem. B) Identify the Solution. C) Roll out the Solution. D) Remove the problem. It's A, B, C, D. But we keep trying to do A, B, D, C.

In any case, if we can reduce the tax burden on fuel without giving up the green projects then I don't have a problem with that. The reason this comes into the debate for me is the mood music from the government is that they understand the problem with the price of fuel and the knock on effects but we absolutely can't fail to achieve our Net Zero targets. To me, given the situation we are in, we absolutely can.

Are there not many ways that revenue could be generated and costs cut to pay for a lowering of fuel prices? Why have you singled out green policies as the answer?

Joe wrote: Sun 27 Mar, 2022 10.31 Are there not many ways that revenue could be generated and costs cut to pay for a lowering of fuel prices? Why have you singled out green policies as the answer?

100% this. Green policy is always easy to sacrifice as its impact isn’t immediately visible, and even if we have a government that does fully commit to it, another one will be along a few years later to reverse it.

all new Phil wrote: Sun 27 Mar, 2022 11.25 100% this. Green policy is always easy to sacrifice as its impact isn’t immediately visible, and even if we have a government that does fully commit to it, another one will be along a few years later to reverse it.

I suppose its similar in that sense to the international aid budget. People say they want to have the money focused on helping people here (which it isn't, by choice) but not only do we not see where the money goes (only failed spending that the Daily Mail inevitably jumps on) but if you can help stabilise other countries, you reduce the need for economic migration of those people with less skills who may end up costing us more money here in the long run.