402.1 Fuel Duty | Scoins.net | DJS

402.1 Fuel Duty

One of the contributors to Private Eye calls himself (or herself) Hedgehog and, in issue 1595, there was a Hedgehog quill about fuel duty.  The Chancellor announced, around March 15th, that fuel duty would continue at its 'new' lower level, 5p less than before. I think 'before' was some time in 2022. 

Those drivers who are recognising climate change see that individually and generally we must drive more frugally in both manner and miles. Now, if the price of fuel goes down then that means that whatever alleged saving was claimed is an overestimate, since the gross mileage for the frugal driver will have dropped. It also means that whatever income the state may be expecting from what duty there is will also be too much and a decreasing sum as more adopt reduced transport stategies. Conversely, the same thinking means that for those who have taken no notice of climate change whatsoever, those who drive large cars, those who exceed 70 habitually and those who make no reduction in mileage – these are the winners when fuel duty is reduced. Hedgehog then conflates these four categories to one and characterises them as a single group, by implication—from the choice of words—stereotypical Tory voters, but you might have a preferred form of words for that conflated group. So by not increasing fuel duty, something that in principle is supposed to happen—fuel duty is supposed to rise in line with RPI, though it hasn't through most of the last dozen years—the population is being encouraged to ignore climate change, to consume more fossil fuel and at the very same time to not contribute to state revenue. Revenue which, if collected, might be put to good use in fixing public transport supply, the thing we need if we are to use our cars less without changing necessary travel.


All in all, I suspect that there are messages here. Coping with climate change is down to Us and not the Them that is the state government. We're going to hold meetings by video-conferencing. We're going to work from home wherever and whenever possible. We're going to walk and cycle a lot more than we have done, which possibly means we use delivery services a lot more. We're going to change the way we approach shopping; perhaps we go little and often to the local convenience and do the 'big shop' at greater intervals, while using Amazon and like suppliers for the relatively unusual items.

Longer term, if a significant number of us spend a lot more time at home then office space will fall in value and house space will rise, especially properties with more land than is permitted in new developments. I have wondered already whether that means we could (and will) convert office space to residential use.

There's more to this, of course: those with the big or big enough houses are the same folk who can WfH ("wuff"?), whereas those who cannot are, I bet, to be found in the poorer quality housing that needs intervention to fix the low insulation values. This must not be seen as a good thing, that the empty house are the ones that society in general woud prefer to be empty.

I also wonder if, as we are steadily being pushed towards using EVs for private transport, so the revenues raised from fuel tax steadily diminish, perceived by 'green' politicans as a penalty tax in some respect for not having switched (along with the implications of being well enough off to afford the capital leap). So at some point in the not so distant future either other taxes rise or new taxes appear; so it seems likley to me that loos of fuel tax is going to lead to a change in how we pay for electricity, not least to ensure that those charging their cars at home end up paying for using their vehicles. I am sure that some ploiticians favour a mileage tax, paying for the distance travelled. Coupled with parking charges and emission zone permissions this coud be seen as a trend that pushes steadily harder against having personal transport. At which point I expect we will see single person electric vehicles, such as scooters and bikes and to see them in vast numbers, along with the demonstation that our infrastructure is not built to cope. I've read predictions of (further) divided society; long-distance transport (possibly driven by robots), city-dwellers using the most convenient alternative but many persuaded to move as little as possible, and the few who can afford to travel meaningfully non-local distance.

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Related to this is a question I haveasked myself often about the difference between the prices of diesel and petrol in Britain. Diesel is consistently more expensive and recently that gap has been up to 20p. Yet I read that bulk purchase of these two fuels has diesel as the cheaper of the two. Why is that?

Also see here, which may give current figures. https://www.statista.com/statistics/1293135/uk-weekly-average-gas-prices/. Similarly, https://www.racfoundation.org/data/uk-pump-prices-over-time      


https://www.tutor2u.net/economics/reference/chains-of-reasoning-and-evaluation-fuel-prices-in-the-uk 

This argues/explains  that when the Gov't changes the excise duty on fuel, suppliers then decide how much of this to pass on to the customer. A second argument is to do with exchange rates; fuel is priced in dollars, so the falling value of sterling (relative to the US) lifts the UK price.

https://www.gov.uk/tax-on-shopping/fuel-duty#:~:text=Fuel%20Duty%20is%20included%20in,5%25%20on%20domestic%20heating%20fuel. This explains that on vehicle fuels we pay 52.95p per litre, plus a further 20% of VAT. So a pump price of £1.50 was £1.25 before the VAT and 72p before the fuel duty. 

https://www.rac.co.uk/drive/news/fuel-news/drivers-paying-20p-more-for-diesel-than-petrol/ Describes the issue I identified, that the difference at the pump is (has been) 20p. https://www.4x4works.co.uk/diesel-fuel/ looks at the several reasons why diesel would be more expensive than petrol. I choose to believe that there is rigging going on and so I blame the government for that. The single argument that says otherwise is to point to density (diesel is heavier per litre by about 20%) and wonder whether transport costs are by weight rather than by volume. If looking to develop school class questions, look also at energy density: diesel is up on petrol by 15%. [Gasoline (petrol)has an energy density of 33,867 megajoules per meter cubed. Diesel has an energy density of 37,184 mj/m3.,  https://rentar.com/diesel-engines-fuel-efficient-gasoline-engines/]

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