« Thought for the day | Main | A taste of his own medicine? »
September 13, 2005
Fuel woes
I find myself green with envy whenever I visit either the US or Australia and have to pay their fuel prices - especially now. The recent escalation in the cost of oil has hit fairly hard here in the UK with a rise of over 50% in the "at the pump" price since January. For someone like myself with no choice but to use a car to get to and from work (a daily average out and return of 60 miles) the mounting cost is eating heavily into my small "disposable" income. A tank of fuel for my car (a diesel) cost, last December, just over £30 and I use roughly a tankful every eight to ten days. Now a tankful costs in the region of £45 and rising. Today I paid £1.05 per litre - and decided that at that price (admittedly at a garage that is known to take advantage of any "crisis") a half tank would see me through the remainder of the week or until I could find somewhere more reasonably priced!
Over lunch I had the dubious pleasure of hearing our ever so caring and concerned Chancellor of the Exchequer, Chief Thief of the Treasury and Grave Robber, Redistributor of Everyone Else's Money to his favourite electorate, piously claiming that his exhorbitant tax on fuel "had nothing to do with the excessive price". Considering that 61% of the cost of every litre is tax - and then he taxes that as well by adding VAT at 17.5% at the pump - I would say he is being extremely economical with the truth. Since his "share" of the price rises with every rise in the basic cost at a more or less exponential rate, its pretty disingenuous of him to say that the tax part is not contributing to the cost. I may not be a mathematician but even I can work out that if something costs £1.00 and you add 61p tax, and then tax that at 17.5% you are suddenly paying £1.89 for your £1 item. Now increase the price by 25p at the base end and the 61 p becomes 76p and the VAT likewise increases in value to make the new price £2.36! Our Chancellor either thinks that we, the paying public are complete idiots or he is unable to do the arithmetic.
Of course the situation is not helped by the media who have talked up the possibility that some filling stations could run "dry" if the planned "Fuel Blockades" happen. It has, as usual, become a self fulfilling prophecy with the gullible dashing to the filling stations and filling ever container they can find with fuel. A colleague is currently having to deal with the usual tranche of morons who have filled up wheelie bins with petrol or diesel (marginally safer!) and are now trying to store these inside their houses! We agreed a few minutes ago that we should cease our efforts on these cases, allow natural selection to happen - and nominate the lot for this years Darwin Awards!
Trying to get to the nearest filling station in my area was a waste of time, the forecourt was solid with little old ladies in blue rinse hairstyles all filling containers and spilling fuel out of overfilled tanks. Alongside them a couple of farmers cheerfully filling Land Rovers (with trailers behind) loaded with Jerry Cans and even one huge tractor with trailer and 44 gallon drums! The next filling station was already dry - so on to the next which still had around a quarter of their usual fuel stock of diesel - but at a price 6p a litre above anyone else! Who us, profiteering?
Between the Chancellor, the Oil Cartels, the Producers and the odd profiteer it could prove to be a difficult few weeks. The Chancellor is unlikely to lower his tax take - he can't because his forcasts are so far adrift he needs every penny he can get - and even if the oil production rose significantly, it is unlikely that any reduction in price will be passed on the the consumer.
Well, I think it's time I checked on the availability of alternative fuels and possibly steam generation to power an engine. I wonder if I could persuade the fish and chip shop locally to sell me his old vegetable oil? Diesel cars run on any light oil so all I would have to do is filter the "fines" and dewater it and I should have a good alternative fuel.
I wonder if anyone has a patent on it yet?
Posted by The Gray Monk at September 13, 2005 02:28 PM
Trackback Pings
TrackBack URL for this entry:
http://mt3.mu.nu/mt/mt-tb.cgi/3008
Comments
Look at biodiesel from waste vegetable oil. (Google can find a bunch of links.) In the US, the cost for materials can run USD 2.50 - 3 per gallon, so the cost benefits aren't necessarily there (I couldn't afford to sell the gas-guzzling SUV to buy a Jetta TDI diesel just for biodiesel), but in Europe with the high fuel taxes, I bet it's very economical.
The chemistry is simple, and very safe, and the waste product is soap (glycerine). Milady's favorite "treehugger" laundry detergent looks like it's the leftovers from biodiesel.
Of course, it's probably dangerous to suggest a new hobby to a blogger.... ;)
Posted by: Kentucky Packrat at September 14, 2005 10:46 AM
Hmmmmmmmmmmmmmmmmmmmmmmmmmmm, now where can I put the biodiesel making plant in my flat? This definitely bears looking into! Thanks for the tip!
Posted by: The Gray Monk at September 14, 2005 02:09 PM
Just a couple of comments on fuel tax.
Firstly, While comparisons of fuel prices between countries will show that the UK has one of if not the highest prices in the world (strangely we also have one of the cheapest prices net of tax), the comparisons hide the fact fuel taxes in the UK are far higher than they first appear.
Home to work travel is probably the major use of fuel for most people. Now here is the rub, Most countries allow the cost of home to work travel as a tax deductable expense as clearly it is money you spend to enable you to earn your income. In the UK this is not the case and unlike in other countries you pay for that journey out of taxed income, In the UK that nearly doubles the cost of the journey after you have paid income tax and national insurance.
High fuel tax is largely a product of labour regimes both past and present. Fuel tax exploded in the mid 70s after the price rocketed due to trouble in the middle east. Net prices of fuel started to come down at a time when Labour were busy letting the unions run the country and were desperate for tax as they had all but bankrupted the country. One of the ways they raised that cash was to increase fuel duty to absorb any net price drops and even increase the price yet further. We are in the same position again with Brown desperate for cash.
The government have used various excuses to justify high fuel tax, the latest one being the environmental cost of petrol driven cars, yet this excuse was exposed when they got customs and excise to chase down people that were using masola driven cars for unpaid fuel duty. If they were that bothered about the environment they would not be taxing biofuels at all.
Fuel duty is the single most damaging tax to our economy as rather than taxing profits of income, it acts as an overhead, taxing economic activity and inflates prices and wages. The negative impact of that is that it makes the UK less competitive.
The fuel protests of 5 years ago reminded us that oil is the lifeblood of the economy and with that in mind it is both morally reprehensible and sheer economic lunacy that the commodity is taxed at all. It is no coincidence that the wealthiest and economically sucessful country in the world is the one with negligable to non existent fuel duty.
Dondilly
Posted by: Dondilly at September 14, 2005 04:17 PM
We in the United States are paying about $3 dollars per gallon. I apologize that I don't know what that would be in Euro. Please don't think ill of me and call me a pompus American... I'm just not good in math.
The main reason for our hike in price is the states is the American oil companies taking advantage of situations like the war on terror and the recent tragedy of Katrina. Their profits are just way over the top. I am a big supporter of President Bush but I just don't understand his handling or lack thereof on this issue.
Dondily is correct in that we don't pay the taxes that ya'll do but we also don't have the government programs you have like socialized healthcare, etc. And for the record, I like it that way.
Take care,
Lisa
Posted by: Lisa at September 16, 2005 01:14 AM