During my lunch break at work today, I found this handy little tool on the BBC website which allows you compare how much your petrol/diesel costs with other countries around the world, and also tells you how much your tank would be without the added cost of tax:
(Click for a larger view)
To give the system the benefit of the doubt, I put in the cheapest local price for diesel in the area. Even so, the results are pretty shocking: on a full tank (I think my tank is actually a bit larger than that) I pay £90.35, of which £52.65 is tax. If there were no tax, I would only pay £37.70. Essentially the tax is 1.4 times the cost of the product.
So remember, the next time you complain that the prices at the pumps are too high, most of the money you pay is tax – 58.28% of what you pay is tax, in fact. Don’t fall into the trap of seeing the large profits the oil companies are making and thinking you’re being ripped off. These companies make most of their money from extraction, refinery and resale – when was the last time you heard of Asda or Sainsburys owning an oil platform? Never – because they don’t – but they still have to get their product from somewhere.
If you’re interested, you can see the trend of petrol prices from 1983 to 2012 inclusive below (click for a larger view). The source data for that graph can be found here. While this doesn’t include data on the rates of fuel duty and tax, you can find that information here, if you’re interested.
There are a few dips in the trend, but on the whole, since the mid 1990s, the overall trend has been an upwards one, and while the cost of the raw product changes in accordance with market forces, the amount of tax (fuel duty and VAT) we pay remains the same year on year, unless altered at a cabinet budget.
The petrol companies aren’t ripping you off: the state is.
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Right from the start of motoring it didn’t take long for successive governments to realise what a useful cash cow every motorist could be. Nowadays governments in this country take it for granted that we will pay whatever is asked for fuel, that we will cough up for so called ‘speeding’ fines and tolerate ever more intrusive monitoring of our roads by Big Brother. And it will not stop there. However, I can see that possibly in my lifetime motoring will once again revert to the hands of the wealthy while us poor plebs will have to give up the struggle to keep a decent car on the road in order to go about our daily lives. Cameron and his cronies would love that…
I’m not so sure they would… The motor industry generates an enormous amount of money, both in terms of tax revenues for the government (from vehicle sales, as well as fuel) and also jobs for mechanics, sales staff and assistance agencies like the RAC or the AA. If only exceptionally wealthy people could afford to drive their cars on the roads, these things would vanish, taking with them all the money they generate, and reducing government income substantially. Its interesting to note that, before tax, there are only a couple of countries in Europe who have lower petrol prices than we do: tax is ruining the motor industry the same as it ruins everything else. You’d think with the resources a government would have at its disposal it would have worked out by now that taxing things into oblivion is not the answer…