George Osborne has cancelled next month's 4p rise in fuel duty in what he has billed his "Budget for growth".
A further 1p will be cut from pump prices at 6pm - all paid for by a £2bn tax on oil companies.Now I could be wrong, but my guess is that the oil companies will need to find the money for this from somewhere. And what's the most likely source of this revenue? My guess would be petrol price increases.
So the government are reducing fuel duty by creating more tax for oil companies to pay - which is likely to push up the petrol price. Anyone else see the problem with this? (or am I somehow reading it wrong?)
1 comment:
There are two aspects.
On the political side, by putting the tax earlier in the process, it gets hidden in the price of the fuel, so should be less politically unpopular than having it upfront as fuel duty.
On the economic side, as oil is a globally traded commodity, the tax will not fall on the same people as the people who would have been paying the fuel duty.
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