The big fuel debate: Will the 1p rise go ahead or not?

Confused.com reporter Lois Avery talks petrol prices and the petition which could make the chancellor do a u-turn.

Running a car is now more expensive than ever, add to that a jump in the cost of rail travel and there’s no doubt we’re all feeling the pinch.

My train ticket, which covers my 40 mile commute to work, shot up by just over £20 a month on 1 January and my short journey to and from the train station is now costing more thanks to the latest jump in fuel prices.

What’s going on with fuel prices?

The recent VAT rise and fuel duty increase hit petrol prices hard, pushing a litre of unleaded up to an all time high of £1.30 meaning Britain now has the second highest fuel prices in Europe.

To make matters worse, fuel duty is set to rise by another 1p in April – a decision made by Labour chancellor Alistair Darling before the election last year.

But following mounting pressure from the public, the media and government opposition, chancellor George Osborne may make a u-turn on this, despite the fact it would deprive the Treasury of £500m a year at a time when public finances are stretched to the limit.

But why is it that petrol price hikes seem to grab the public’s attention more than other tax rises?

The VAT rise has pushed prices up on other day to day items but it feels minimal and  drip feeds in so we don’t feel too hard done by, a penny here, a few pence there unless you’re buying something big.

Perhaps it’s because every time you use your vehicle you’re reminded by your falling fuel gauge that you’ll have to fill up sooner.. Each journey costs you slightly more than you’re used to. And the more you have to spend on fuel, the less you have to spend on other things.

 So will the government scrap the planned 1p rise?

Osborne hinted during a BBC radio interview this week (27 Jan) that the government could potentially ‘override’ the 1p rise ahead of the 23 March Budget. There’s also the ongoing whisper of a fuel stabiliser, which would help protect motorists at the pump against the fluctuating price of oil.

But the Treasury is keeping tight lipped, saying that all taxes are under review and no announcement will be made ahead of the Budget.

But in the meantime, the Great British Public is taking a stand in light of the possibility and Confused.com has also waded in to throw its weight behind the protest.

We’ve joined forces with The Sun newspaper in the fight against rising fuel costs –find out more about the campaign which is calling on George Osborne to freeze petrol tax. We’ll be revealing more about this in our next newsletter, so keep an eye out for what we’ve got in store.

Are you feeling the effect of pricy petrol and diesel? Let us know how much more the proposed hike will cost you. Tweet me @confusedlois or email lois.avery@confused.com.

Comments

[Andronicus]

It is fantastic news. I do hope petrol and diesel doubles or even triples in price. The only thing that has stopped electricity and other cleaner fuels not being used before now is the self-serving cartel of global oil self interest. By 2013 or thereabouts we will have reached the peak oil situation when it becomes economically non-viable to search for new sources of petroleum. The internal combustion engine will soon be a museum piece. It was fun but its 20th century technology and has no place in the world today.

[Stephan]

I live in a village some 5 miles from the nearest town. If I decide to go to the supermarket by car, it takes me 10 mins and I can carry all my groceries in the car. There is a bus every hour so the minimum return visit to a supermarket takes 3 hours. I took the bus to buy two tyres for the car. Try getting on a bus carrying two tyres. Of course I could take a taxi - which uses petrol or diesel and is less cost efficient than a bus. Too many policies are decided in London without considering the impact on rural areas.

[conor]

I wish people would stop winging. catch yourselves on please!

[Stephan]

Conor - what do you mean "catch yourselves on" Is this English?
As for winging, it's called "democracy" i.e. the ability to express your opinion.

[Stephan]

Sorry - I meant "wingeing". "Winging is entirely different

[Paul]

With 70p out of the cost of a 126.9p litre of fuel going to the government in taxes they already get far too much as it is.

How any government that claims to stimulate our economy then piles pressure on transport costs by loanshark rates of taxes on fuel to both haulage and private motorists beggars belief.

[Gary pitt]

if petrol or derv goes up any moor it will not be worth me going to work ! i don't have holidays as it is so all my money goes on food ect i might as well sign on one thing i have never done!! and i have been working for 26 years and how manny moor people out there are in this perdicament ,as for the people that go on about electric cars don't they have to be charged by fossil fuels

[d lockie]

what we pay in tax in the uk is a bloody rip off, vat should be scrapped you dont encorage growth by hammering people with tax i am on a low wage and im struggling to survive.

[Tony Powell]

the price of petrol is robbery without violence they tax us on our salaries then they retax us on every other thing that we purchase but on petrol we have 2 taxes vat & duty.

[Ryan]

I'm still waiting for the petition, where is it ??? clicking the link takes you to this page ?? this is not a petition !!!!! this is where people like me rant !!!!

[Ryan]

"It is fantastic news. I do hope petrol and diesel doubles or even triples in price. The only thing that has stopped electricity and other cleaner fuels not being used before now is the self-serving cartel of global oil self interest. By 2013 or thereabouts we will have reached the peak oil situation when it becomes economically non-viable to search for new sources of petroleum. The internal combustion engine will soon be a museum piece. It was fun but its 20th century technology and has no place in the world today."

Well you obveously have lots and lots of money and have no idea how 99% of the UK population live near the bread line.

Electricity is NON VIABLE as a replacement as you would have to build more power stations as everyone plugs in the car to charge which leads to more pollution, buring of gas, coal or go nuke, Hybrids are good but have limmited usage, for local slow speed town driving they are great, but for longer / faster you need an engine, the greedy govenment are the ONLY people who gain out of tax rises (where benefit fraud and stupid MPs expences rip us off on top of that we give £4.5 Billion to the EU who don't do us any good either, surely it would of been better to use that 4.5 billion to safeguard BRITISH jobs !!!!! the generall working class take it up the butt and the govenment dont give a rats butt!!!

[Tino]

at the moment the cost of crude oil is 42 pence a litre, refining costs 2 pence a litre transportation costs approx. 7 pence a litre, oil company profit (approx. 20%) 11 pence a litre, this nakes the price to the retailer 62 pence a litre, he adds approx. 6 pence a litre profit for himself, price at the pump 68 pence a litre, everything else on top is duty and VAT, which means you are paying almost 100% tax on fuel, doesn't seem quite right does it.
Also why do we put up with paying VAT on duty as this is added last, VAT is for luxury goods only, I do not think that the duty on fuel is a luxury.