MX-5 OC Forum

Gary Beale:

As for petrol, really it's a no brainer. Cut the duty and we save money accross the public sector. Goods and services will be cheaper ergo, we will be able to afford them, thus the ecconnomy grows, simples.

If we cut fuel duty, there is no guarantee that the cost reduction will be passed on in the form of cheaper goods. Most goods are sold at the price that the market will bear, not the cost of producing them.

And if we do cut fuel duty we will need to replace the lost income. If we push up another tax (say VAT or income tax) that will reduce the amount of money that consumers have to spend. So we buy fewer goods, employ fewer workers, raise less in purchase taxes.

Simples it most certainly is not.

If it was that easy we would have done it by now. As for North Sea oil, it has certainly helped but it was nowhere near as lucrative as some people claimed.

Once:

If we cut fuel duty, there is no guarantee that the cost reduction will be passed on in the form of cheaper goods. Most goods are sold at the price that the market will bear, not the cost of producing them.

I have to agree with that - older members (agewise) will remember when Purchase Tax - at 25% - was removed from white goods back in the fifties. We all thought "Good - now we can replace that prewar cooker, or buy a new fridge". No such luck - most prices went down by a measly 5%, with some generous retailers offering 10% savings. The philosophy one assumes was - "If you would buy it with 25% P.T., then you'll buy at at 5% off.

More - after my second redundacy, I finished up working for an Electrical Wholesaler (No names here!) We stocked, among many other electrical items, what's called 'Control Gear' made by a French company. One of our best customers rang up one day and asked to speak to our Manager, he later told me what the conversation was about - Apparently this company also had branches in the States and in Europe, and they decided to do a cost excercise right through the areas to see what items were costing them. Turned out the Control Gear we sold was 20% cheaper in Europe than we could buy it from the UK branch of the French manufacturer. The local buyer was pretty uptight about this, and he demanded a meeting with a senior representative of the French Company here in the UK.

We never heard the outcome of that meeting, but subsequently the area Rep of the French Company came in to see me, and I asked him "Why the cost difference?" he replied "Treasure Island"! and smiled. I said "Which means what?" England is treasure Island to the rest of the world" he replied, adding, "foreign companies (including his) will mark products up in the UK to what the market will stand, and England is a lucrative market for anyone from outside".

Go back a decade or two, and remember when people were buying cars in France and Germany because of the cost difference there was in the UK?. So - a lot of people were getting rich, thanks to us gullible people.

More - go to any supermarket I shop at Asda and Tesco mainly) - it's now a time consuming excercise especially at Tesco, to find an English vegetable, they come from Morroco, Chile, Namibia. and Lord only knows where else in the world - the list gets longer every week. The price - as Martin's wife has commented - goes up nearly every week, and in some cases exceeds the cost of fresh English produce at the one remaining independant green grocer in Long Eaton - our alternative shopping area (what's left of it)., Again - somebody is getting rich at the expense of Joe public, they have taken over the market and now we are paying the price they demand.

I would go to a farmers market - there are several  in Lincolnshire, but any saving would be offset by the rising cost of petrol - - - - -

Once:

 

 

If we cut fuel duty, there is no guarantee that the cost reduction will be passed on in the form of cheaper goods. Most goods are sold at the price that the market will bear, not the cost of producing them.

Interesting stuff. I've no idea where this group came from. The other interesting question is just who is spreading rumours about them and trying to discredit them? The Government or the oil industry?

We could make a great conspiracy theory about all of this.

Dear FairFuelUK Supporter

We imagine that, like us, you are angry and disappointed by the failure to act on petrol & diesel prices in this afternoon’s Budget.

The Government has not listened to our evidence that it could have reduced petrol & diesel tax AND been no worse off in overall revenue.  This is a ‘slap in the face’ to every family and business in Britain.

Our view is that the failure to scrap the fuel duty rise is the ‘Bombshell in the Budget’.  It will do immense damage to families and businesses.

Yes, we are angry and disappointed – but we are not giving up.  If today’s failure to act shows anything is shows this – we need more support than ever.

If you share how we are feeling, please spread the message by every means you can that FairFuelUK needs every family and business behind it.  We HAVE to fight back.  We need everyone in Britain that cares about the crippling damage being inflicted by high petrol & diesel taxes to actually sign up at www.fairfueluk.com.

Every signature makes our voice more powerful.  We currently have 220,000 supporters but need thousands more.

To make George Osborne life more difficult and get the vital change in thinking on fuel duty we need an even bigger show of ‘people power’.

Quentin Willson and the FairFuelUK Team

The FairFuelUK campaign is backed by the RAC, the Road Haulage Association RHA, the Freight Transport Association FTA and the country's leading fuel card specialists the Fuelcard Company . It is supported by over 220,000 members of the public and over 150 Parliamentarians.

Budget - Petrol up by 3p per litre : Vehicle excise duty to increase : and Pension tax allowance to be capped at £9,000. - -  Now how much do you want to give away?

@Gerryn - good stuff. Wholeheartedly agree.

One story I liked was about the high street shop Chelsea Girl. Not the sort of shop that I normally frequent, but I liked this story. Apparently Chelsea Girl was really popular during the 1960s, but faded after that.

They employed a marketing consultant who told them that their image was too cheap and cheerful for the modern label conscious market. The consultant recommended that they should change their name to River Island, and change their shops so that they sold fewer lines more widely spaced apart. Oh, and they should put up their prices to give the impression that the customers were buying quality. The result was that the customers flocked to this exciting new store and paid higher prices for the same clothes that they could previously have bought for less. And felt good about it.

Another story. I was in an off license and overheard this conversation:

Customer: I'm having a dinner party tonight and would like a bottle of red wine. Something around £10 would be good.

Assistant: We've got a special offer on this wine today. Really good value at £7.99.

Customer: But I was looking for a bottle at £10.

Assistant: Yes, but this stuff is very very good. I can sell you several bottles at £10 but they won't taste as good as this one.

Customer: No, I do want a £10 bottle.

Frankly you couldn't make it up. Sometimes I think we are our own worst enemies.

Sorry - I ought to clarify. When I said I agree, it was to your post about the cost being set at what we are prepared to pay.

What I don't agree with is the fair fuel price rhetoric. Their arguments simply do not stack up.

Pity that our last two posts crossed in the ether!

Gerryn:

Budget - Petrol up by 3p per litre : Vehicle excise duty to increase : and Pension tax allowance to be capped at £9,000. - -  Now how much do you want to give away?

This increase was brought in how long ago again? It has been suspended for how long again? None of which explains the wild variance in petrol prices dependant on where you live. There is zero justification for 6,7 or 8p differences in a litre of fuel supplied by the same establishments.

Pension tax I completely agree with. Fuel duty I don't. Its way below the rate of inflation given how long since it has finally been allowed to happen. Quentin should focus on the price fixing instead. He would get more support on that matter.

Edited for an amusing typo.

http://www.theregister.co.uk/2012/03/15/asteroid_near_miss/

Glenboy:

There is zero justification for 6,7 or 8p differences in a litre of fuel supplied by the same establishments.

Justification?  The justification is that we exist in a free market and people can sell things for what they want.  If a retailer can get away with selling things for more in a particular area, they will.  A McDonalds meal is more expensive in central London than elsewhere, because the market can stand it.

Glenboy:

Edited for an amusing typo.

Was it a misspelling of pension?

nickbee:

Glenboy:

There is zero justification for 6,7 or 8p differences in a litre of fuel supplied by the same establishments.

Justification?  The justification is that we exist in a free market and people can sell things for what they want.  If a retailer can get away with selling things for more in a particular area, they will.  A McDonalds meal is more expensive in central London than elsewhere, because the market can stand it.

Glenboy:

Edited for an amusing typo.

Was it a misspelling of pension?

There is a slight difference between free market and price fixing. If you check the financial services act there is a lovely and very longworded paragraph(s) on the topic. Supermarket fixing of fuel prices in an area is not a new thing but is surely a thing that should be addressed. I think the majority of people may find that 3p a litre on tax would be easily swallowed by this being resolved. Bear in mind that most supermarkets,airlines and utility companies are pricing their fuel on todays oil spot price. However they have bought that fuel on futures prices 3-6 months ago. Futures prices were around 85-90$ at that time. The major supermarkets/petrol companies are justifying the current rises on the last few weeks spot rises. Now of course, additionally there are pipeline prices, refinerie prices and transportation costs to throw into the mixer... but all these prices were approximately the same percentage lower in the last 3 months of last year. Its smoke and mirrors.

Petrol prices are not a free market. There is a certain amount of economics involved in where you can get your petrol. I.e. cost of fuel used to reach a cheaper station etc..... Unless, you have an Asda card only fuel court. Then, miraculously, you will find that surrounding petrol stations will be at that price or very close, because they want to compete. Its not as tho you can order online etc. 

The typo was actually that I typed "love" instead of "live". :)

AccHacked:

......TBH I never even look at the price at petrol stations as petrol is such a small proportion of the cost of owning a car.

Please explain how petrol is "such a small proportion of the cost of owning a car".

Road tax £200 - £440 (depending on car) a year.

Insurance £500 a year (lets go made and say £1000)

Servicing again lets go made £1000 a year

At £60 plus to fill up it won't take long to be a large proportion of owning a car! Or do you only drive 10 miles a week?

Don't forget we are not talking about the fuel used in your MX-5 but all fuel used in your cars and also the lorries used to transport your food to the shops etc.

Easy. You conveniently forgot to mention the cost of purchasing said car(s), the depreciation of said car(s) (or the tax payable), the cost of modifying said cars(s) to make then fit for purpose (vans etc), the cost of time lost when vehicles are off the road after, say, accidents.

That should do, off the top of my head.

The most up to date national statistics I can find are from 2008. The average household spends £52.90 per week on cars, motorbikes and bicycles. This breaks down into purchase (new and second-hand) £21.10, repairs and servicing £8.60, fuel/oil £21.00 and other motoring costs £2.10.

Costs have increased since 2008. This is an average for all households, so it will include some households without a car. But that's just the way the statistics work.

Naturally, everyone will vary above or below these numbers. If you spend a lot on parts and upgrades (as many of us here do) then that number will be much higher and the proportion spent fuel lower as a result. Remember that these numbers are for the average household - including the millions who don't do anything to their cars other than minimum of servicing and MOTs.

From memory, a typical breakdown for HGVs and bus companies are that 40% of their costs are fuel, 40% are salaries and the remaining 20% goes on everything else.

The bottom line seems to be that fuel is on average around 40% of the cost of motoring, for both domestic and business.

once, are there any previous figures? It would be good if there was at least a comparable % increase/decrease.

We find that things like parking/fuel congestion/liability insurance/GAP insurance/vehicle training etc have increased by around 10% as a whole. Fuel - 6% over the same period.

I get a quarterly breakdown of the top ways to cut our costs - strangely, fuel has only ever been on there once. When we looked into it, it was around the time I spent an extended trip in europe going around a track   (my only foreign holiday since 1996, incidentally)