Every 'silver lining' has a 'cloud'. How is George going to make up for the lost revenue particularly as petrol taxes are the the easiest and speediest to collect!
Every 'silver lining' has 'cloud'. How is George going to make up for the lost revenue particularly as petrol taxes are the the easiest and speediest to collect!
If the price of petrol is dropping, maybe more people will consider a drive into the country to be an affordable day out, meaning they use more petrol. As tax on petrol is a set figure per liter that would be an increase in revenue??
True, especially with the festive season upon us but it will nowhere near compensate for the loss in the revenue from the day to day essential use purchases. I'm still not convinced it will be a long term reduction anyway but who knows with the world economies as they are!
What day to day purchases? Are we still talking about petrol?
People are going to stop their essential purchases because fuel has dropped in price?
You pay VAT as part of the cost of fuel. Therefore the cheaper the fuel element the less revenue going to the Exchequer.
VAT makes up a tiny amount of the tax paid on fuel, surely?
It was in the range of 20-25p per litre pre the price crash. The Excise duty which remains the same whatever is about 60p. So the VAT drop will be a significant loss.
The cost to the exchequer is not Osbornes problem unless the Tories are in government in June 2015. The drop will make everyone feel better off in the run up to the election. Far more important is the impact on Putin and Russia where I see the Rouble has halved against sterling and the dollar this year. Russian markets took a battering yesterday and interest rates have been moved up to 17%. I have heard from an insider that oil will fall still further next year so the fun will continue!
could be deflationary, crazy world where oil prices going down can be a bad thing..
I saw something a month or so back differentiating between benign deflation factors like oil price falls and vicious ones like demand going down due to insecurity or expectations of more price drops. The Eurozone doesn't have enough demand and that affects us because they buy our stuff... But oil price drops should put a lot of cash in everyone's pockets helping us to spend elsewhere.
So... with petrol prices on the way DOWN... train companies put their fares UP
Great way to stop people clogging up the roads in their cars
Airlines putting up prices too, they must be benefitting more than any other industry.
Yeah that probably isnt helped by the fact people can claim compensation for a delayed flight going back years now... the Airlines are going to have to re-make the money somehow
Don't seem to have halfed at the pumps, yet price of crude has apparently fallen by nearly that much in six months, tax? Profiteering?
Anyway what is the cause, are US increases in production aimed at hurting Russia? And OPEC refusing to reduce demand
Its a bit of all three, petrol is taxed quite highly. like cigarettes of which 80p in the £1 goes to the treasury, not sure of the petrol breakdown but it is similar. Drops at the pumps should still come through, but look out for the next government hiking up petrol again.
Saudi are too committed to expenditure that they cannot reduce production, shale in US has moved US to virtual self sufficiency.
Knock on effects are that oil exploration in Arctic and other new territories have been postponed as they are no longer commercially viable.
Id argue that the move in the US to a net exporter of fuel is more to do with the lack of domestic demand for Petrol and Crude due to its price relative to wages. Many Americans simply cant afford to use as much petrol as they have done in the past, but I think this is more to do with price rather than the production of shale gas.
Producing oil from kerogen shale is still much more expensive than producing crude in traditional form and remains of limited use.
Yes, we actually pay the VAT on the duty... So they get you twice there haha
So effectively if we say it is 60p a litre, then add the 20%, you are paying a minimum of 72p a litre in tax, assuming it was free after that, then every penny added on you get an extra 0.2 pence, meaning that a 30p drop is a 6p loss for the government.
Spread that out across millions of cars, and it adds up to a fair bit.
Don't seem to have halfed at the pumps, yet price of crude has apparently fallen by nearly that much in six months, tax? Profiteering?
Anyway what is the cause, are US increases in production aimed at hurting Russia? And OPEC refusing to reduce demand
Its a bit of all three, petrol is taxed quite highly. like cigarettes of which 80p in the £1 goes to the treasury, not sure of the petrol breakdown but it is similar. Drops at the pumps should still come through, but look out for the next government hiking up petrol again.
Saudi are too committed to expenditure that they cannot reduce production, shale in US has moved US to virtual self sufficiency.
Knock on effects are that oil exploration in Arctic and other new territories have been postponed as they are no longer commercially viable.
Id argue that the move in the US to a net exporter of fuel is more to do with the lack of domestic demand for Petrol and Crude due to its price relative to wages. Many Americans simply cant afford to use as much petrol as they have done in the past, but I think this is more to do with price rather than the production of shale gas.
Producing oil from kerogen shale is still much more expensive than producing crude in traditional form and remains of limited use.
Shale and oil from Africa is still much more expensive to extract than middle east oil.
Big Oil dwarfs nations. When i was working for ExxonMobil they were posting 1/4 years profits of $2,800 MILLION
They built the ppe lines for Russia`s gas and the pipe lines right through Africa (projects based in London). They re-built the ports at Milford Have and South Hook for LNG (Qatar to USA).
Their project in Papa New Quinea is said to cost $18 BILLION.
Horrizontal drilling has lengthed the life of North Sea oil
Shale oil will lead to the USA not being reliant on the middle east for oil. The head of BP has said he is astounded by the production / prospects of shall oil (only in UK is it seen as a total negative)
Deep sea oil (with all the risks) is still there.
Still in dear old UK we cant have Nuc power, or oil,gas, shale oil----lets just hope it keeps windy.
Sky news reporting unleaded falling to 99p in January 2015, a 7 year low
What kind of price is it coming down from, out of interest? About 3 months ago it was about $1.20 / litre here and it's now about $0.80 so has dropped by about 1/3, would be interesting to know if the price is falling at the same rate in the UK.
At the moment I find myself hanging on until the tank is virtually empty before I fill up because the price seems to be coming down almost daily.
Being of the old-old school, I tend to convert in my head to mpg and the price of fuel to "per gallon". The fuel/petrol I bought yesterday cost £114.9 per litre which I believe is £5.40 per gallon. I cannot get excited about £5.40 per gallon (although am happy with any reduction) but wonder if anyone knows how long ago it was that it went up to that price or even £5.00. I won't bore you by stating how much it was when I began driving.
Being of the old-old school, I tend to convert in my head to mpg and the price of fuel to "per gallon". The fuel/petrol I bought yesterday cost £114.9 per litre which I believe is £5.40 per gallon. I cannot get excited about £5.40 per gallon (although am happy with any reduction) but wonder if anyone knows how long ago it was that it went up to that price or even £5.00. I won't bore you by stating how much it was when I began driving.
So, a gallon of petrol is now about the same as a pint of lager in a Canary Wharf boozer. Should that correlation be built in to the calculations on the drinking and driving thread? That is, how can you afford to get drunk enough not to drive?
Been putting off filling my car up for a week now as it seems to be dropping everyday.
I had to chuckle at certain sections of the media bemoaning the fall in prices. On one hand they bleat about fuel poverty & streetlamps being turned off between 1 and 4 in the morning then moan that lower petrol prices will mean people will be using far more petrol, leaving their lights, TVs and ovens on when they're not using them and taking advantage of cheaper flights. This is especially hilarious given the journalists involved are notorious for jetsetting all over Europe on luxury holidays to their Tuscan mansions or to go see their rent boys. I think after all the monstrous duty rises of the last 15 years, might be nice to let motorists enjoy some short-term relief.
Comments
Far more important is the impact on Putin and Russia where I see the Rouble has halved against sterling and the dollar this year. Russian markets took a battering yesterday and interest rates have been moved up to 17%.
I have heard from an insider that oil will fall still further next year so the fun will continue!
Great way to stop people clogging up the roads in their cars
http://www.bbc.co.uk/news/business-30507970
But oil price drops should put a lot of cash in everyone's pockets helping us to spend elsewhere.
Producing oil from kerogen shale is still much more expensive than producing crude in traditional form and remains of limited use.
So effectively if we say it is 60p a litre, then add the 20%, you are paying a minimum of 72p a litre in tax, assuming it was free after that, then every penny added on you get an extra 0.2 pence, meaning that a 30p drop is a 6p loss for the government.
Spread that out across millions of cars, and it adds up to a fair bit.
They built the ppe lines for Russia`s gas and the pipe lines right through Africa (projects based in London). They re-built the ports at Milford Have and South Hook for LNG (Qatar to USA).
Their project in Papa New Quinea is said to cost $18 BILLION.
Horrizontal drilling has lengthed the life of North Sea oil
Shale oil will lead to the USA not being reliant on the middle east for oil. The head of BP has said he is astounded by the production / prospects of shall oil (only in UK is it seen as a total negative)
Deep sea oil (with all the risks) is still there.
Still in dear old UK we cant have Nuc power, or oil,gas, shale oil----lets just hope it keeps windy.
What kind of price is it coming down from, out of interest? About 3 months ago it was about $1.20 / litre here and it's now about $0.80 so has dropped by about 1/3, would be interesting to know if the price is falling at the same rate in the UK.
At the moment I find myself hanging on until the tank is virtually empty before I fill up because the price seems to be coming down almost daily.
I had to chuckle at certain sections of the media bemoaning the fall in prices. On one hand they bleat about fuel poverty & streetlamps being turned off between 1 and 4 in the morning then moan that lower petrol prices will mean people will be using far more petrol, leaving their lights, TVs and ovens on when they're not using them and taking advantage of cheaper flights. This is especially hilarious given the journalists involved are notorious for jetsetting all over Europe on luxury holidays to their Tuscan mansions or to go see their rent boys. I think after all the monstrous duty rises of the last 15 years, might be nice to let motorists enjoy some short-term relief.
If I recall you seemd to like your Tuscan mansions as well :-)