Why is Petrol So Expensive in Britain?

Petrol is now nearly £6 a gallon, or some £1.15 a litre, of which 67p or some 57% goes to the Treasury. But that is only the beginning of how the Treasury makes more out of high petrol costs than OPEC and the oil companies combined.

The price differential between Britain and America is almost entirely due to taxation. Americans are enraged that they are paying $4 a gallon, they would probably have another revolution if they had to pay the equivalent of $12 a gallon as the British do. Even Europeans pay lower fuel taxes than the British, in some cases dramatically lower tax rates.

In the 2005 budget Gordon doubled the tax levy from 10% to 20% on oil explorers. At the time the Offshore Operators Association said it was “shocked” by the chancellor’s decision. “At a single stroke, the Treasury has rewritten the industry’s future. It will severely undermine business confidence,” warned the OOA chief executive, Malcolm Webb, “This has been done not once but twice in the space of just three years and we fear that this time the North Sea will not be as resilient.” And so it has proved.

Former oil trader Alan Duncan, the Tory Business Shadow, says Brown‘s actions over oil production are “not just laughable, but pitiful… he has completely lost the plot.” The government has belatedly today exempted 30 unprofitable oil fields from Petroleum Revenue Tax and granted licenses to two new sites. It was Gordon himself who doubled the Petroleum Revenue Tax three years ago.

What bemuses Guido most is that in the midst of all these difficulties, Alistair Darling is still dithering and doesn’t know if he wants to delay adding 2p a litre to fuel costs. He doesn’t know? He really doesn’t have a clue does he?

UPDATE : Osborne spotted the problem last year.




Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Jeremy Corbyn on Big Ben Bong Ban

“… if we have to miss Big Ben in reality for a while so that work can be done, well, that’s something we have to go through. It’s not a national disaster or catastrophe.”

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.
Fears For Chapman Fears For Chapman
Why Transition Must Be Short Why Transition Must Be Short
PICTURES: Seumas’ Temper Tantrum PICTURES: Seumas’ Temper Tantrum
Don’t Believe ‘Victory For Hammond’ Spin Don’t Believe ‘Victory For Hammond’ Spin
Friday Caption Contest: Commando Chappers Edition Friday Caption Contest: Commando Chappers Edition
Angry Adonis Wanted ‘Office for Students’ Job Angry Adonis Wanted ‘Office for Students’ Job
Listen: Rees-Mogg vs Chapman Listen: Rees-Mogg vs Chapman
City Envoy Slams “Bewildering” Brussels City Envoy Slams “Bewildering” Brussels
Labour Pledged to Sell-Off Public Land Labour Pledged to Sell-Off Public Land
Corbyn’s ‘Local GPs’ Visit Staged by Labour Spin Doctor Corbyn’s ‘Local GPs’ Visit Staged by Labour Spin Doctor
Joly-Gone: Maugham Deletes Centre Party Plan Joly-Gone: Maugham Deletes Centre Party Plan
Milne: North Korea ‘Rational’ to Have Nukes Milne: North Korea ‘Rational’ to Have Nukes
LibDem Chief Exec Out LibDem Chief Exec Out
Jones Ditches Momentum For Radio Show Jones Ditches Momentum For Radio Show
Chlorine Chicken? EU Mired in Food Safety Scandals Chlorine Chicken? EU Mired in Food Safety Scandals
Juncker’s Junkets: Commissioners’ €500,000 Expenses Juncker’s Junkets: Commissioners’ €500,000 Expenses
Owen Jones in for Nawaz on LBC Owen Jones in for Nawaz on LBC
Watch: Maduro’s Thugs Executing Opponents Watch: Maduro’s Thugs Executing Opponents
Inside Baroness Scotland’s Home – But No Pictures Allowed Inside Baroness Scotland’s Home – But No Pictures Allowed