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. 

Now, if the price of fuel goes down then those drivers who are recognising that climate change means we must drive more frugally in both manner and miles. That means that whatever alleged saving was claimed is an overestimate, since the gross mileage for the frugal driver will have dropped. 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 this as a single group, by implication a typical Tory voter, though that is not explicitly stated. 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.

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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 £150 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 up 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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