According to the RMI Independent Petrol Retailers Association (RMI Petrol) the price of filling your tank is set to rise significantly in 2010. This, they say, has nothing to do with oil prices or speculators but is down to expected tax increases in the coming months. It could add up to 15p to the price of a litre. This adds £7.80 to the cost of filling up a 52 Litre fuel capacity Vauxhall Astra 1.6.The first hit will be in 2 days time when VAT returns to its original 17.5% (up from the ‘holiday’ rate of 15%). Then in April fuel duty is set to go up in line with inflation but with the addition of an extra 1p for every litre due to the reintroduced fuel duty ‘escalator’ designed to drive fuel usage down. The refiners of biofuel have also had a tax incentive withdrawn which could see a further 1p added to the cost when passed down to the driver.
On top of this there is the dark cloud of extra taxation hanging over the country because of the hideous state of the UK public finances, and what easier target than the motorist? But remember, about 70% of the cost of every fill-up finds its way in to the Chancellors coffers or, at £1.10p per litre that’s a cost of £57.20p to fill up the Astra with £40.04p of it going to the government and only £17.16p to the retailer. Food for thought, especially as traffic usage seems to have increased not decreased. Is this a tax failure because it has not achieved its stated aim? Or a tax success because it raises so much revenue?
As the cost bites people may well start casting further afield for a better price putting a squeeze on already hard pressed rural petrol stations. RMI Petrol has also been fighting the government over business rate hikes effective next April that could result on huge increases for petrol retailers. The rates, unlike for other retailers, is not based on square footage but on turnover. So as petrol prices go up, so do the rates. A double whammy, not just for the retailers but also to some local communities who rely on these outlets as local shops as well as fuel suppliers. This could mean petrol station closures in the hundreds, especially in more remote areas.
There will also of course be the increased cost of transporting goods around the country. So expect a hike in inflation across the board.
It has been said that one of the sure signs of a vibrant economy is a high level of traffic as people bustle about their daily business and goods, letters and people are delivered. But it looks like the taxman has other plans, but not to appease the green lobby. That empty purse desperately needs refilling.
------ Other articles of interest ------
Tags: diesel prices, fuel duty, fuel duty escalator, News, petrol prices, rmi, rmi petrol, tax, vat
[...] This post was mentioned on Twitter by Economic Voice, Gas Diesel Prices. Gas Diesel Prices said: Price of petrol and diesel looks set to rise http://bit.ly/5BsmPl [...]
[...] here to see the original: Price of petrol and diesel looks set to rise « The Economic Voice Posted in Diesel | Tags: coal-yields, Coming, Cost, Diesel, expected-tax, fischer, lever, [...]
[...] the end, your guess is as good as mine. In a comment on my recent post on internet censorship, Jeff Taylor, of The Economic Voice, said: James, I don’t think the end aim would be to ban any sites. No, the ideal end aim would be [...]
This is tied in with food and water as well.
Absolutely James, as I say in the piece inflation will go up across the board.