Why a Fuel Duty Cut is a Bad Idea

The cost of petrol and diesel is hitting record levels, piling pressure on drivers who are already suffering from rising inflation. Something should be done about it!

Or so reads a typical headline and leader from the Daily Wail, Express or Telegraph. They think that the government in the form of Rishi Sunak should reduce fuel duty to save them money and if you read the comments sections – it’s all the fault of bloody windmills (that don’t work), woke Carrie and her Svengali grip over Boris, subsidies for EVs, cyclists and those bloody green levies! It’s enough to make your blood boil!

The Spring Statement this week does give Rishi the chance to tinker with things. This is a major date in the government’s calendar and there are people working night and day on it, right now as we speak. And as much as the tinkering, nudges and changes are fully calculated, costed & impact assessed – Rishi can just wing it and throw out whatever he likes. He did it last time and he’ll do it again. And as someone who sees the opportunity to step into No. 10 within grasp, his popularity with the wailing boomer mob is important – and he knows it.

The green bean, quinoa metropolitan elites will never vote Labour and as such he’s preaching to and performing for the converted – and he’ll be keen to keep white van man on side along with SUV Steve.

A cut in fuel duty would be very popular – just after the time petrol prices hit a peak. And the spectre of a lorry driver protest will be in the minds of many a politician (which is why the fuel duty escalator isn’t running any longer).

Petrol and diesel are still insanely cheap. If you think that my average family car can travel 10 miles on just 1 litre of petrol that cost me £1.60 recently. That’s 10p per km or 16p per mile. Try convincing a teenager to take the dinner plates into the kitchen with a shiny 10p and you’ll be laughed at! I’m also pretty sure that there’s no such thing as a 10p mix anymore. Petrol is cheap – it only become expensive if you use too much or come dependent on it – and making something cheaper for addicts isn’t the best way to treat an addiction.

Why Fuel Duty Shouldn’t be Cut

This is maybe a once in a generation opportunity to realign our economy away from fossil fuels and towards greener energy. The cost of electric cars is already approaching conventional ICE cars – and if you do drive a lot like those that will be hurt by the high cost of fuel, you have most to gain from switching. I get that it’s expensive, I filled up recently and it was £63 for less than 40 litres at my local station.

Fossil fueled inflation!

Imagine that we are all in a pub and getting ourselves totally trashed by drinking cheap booze. We know that we’ll wake up with a hangover but we keep drinking – we are only social drinkers after all. As we keep drinking, the price of booze goes up and up to the point where £20 won’t buy you a round. You could save money by drinking non-alcoholic beers or just water – but you’d not be a real man then. That’s where we are at right now and everyone wants Rishi to pop off to the Co-op to buy more booze on the cheap and have an after-party at his place (socially distanced of course). Bigger hangover all round guaranteed.

In the Resolution Foundation publication with the witty name “Catch-2022” this exact problem is discussed. How best to help people in the face of rising fuel bills – be it gas, electricity, heating oil as well as petrol/diesel along with the rest of inflation (in part due to imbedded price rises from higher energy inputs) – and it’s probably not best done through reducing taxes. Reducing taxes will mainly help those that consume the most – irrespective of the affordability. It’s a crude measure which lessens the impact, has a great cost to implement and fails to teach us the lesson.

Fuel duty is an unequal burden

If the lesson from this energy price shock is that we should look at ways of reducing our energy consumption – using tax payers money to make it easier on the biggest consumers/polluters is wrong.

Populism vs. Hard Truths

The easy way out is to bail out those that use the most fuel. Those that bought larger cars than they needed, cars with lower MPGs, that they drive uneconomically, those that leave their cars idling and have chosen a life that makes them dependent on petrol power transport for everything. It’s easy to see where they’ve gone wrong and they don’t deserve sympathy. We need to imprint on our collective psyche all the things that we need to do to achieve net zero – you instinctively know what they are but it takes a bit of pain for us to do something about it. A great example is the plastic bag tax – nobody thought throw-away plastic bags were great but it took a 5p tax to get people to change their minds. Since its adoption in Scotland, plastic bag use dropped by 80%.

In the same way, this current hike could help us reduce how much money we waste on foreign oil. Every litre of petrol less used is one less bullet for Putin’s army. Failure to reduce our consumption of fossil fiels just leaves us either open to another price shock or keeps us in hock to OPEC & Russia – a situation I’d rather not be in.

The money that could be wasted in reducing fuel duty could be better spent on reducing our fuel consumption in the medium to long term. It’s not difficult to imagine ways. But I would like to see greater use of working from home. I’ve cut my own petrol consumption from commuting pre-pandemic by over 80% – we should keep that up and not go back to the office if we can work from home just as well.

The International Energy Agency has its own 10 point plan to cut oil use.  Have a look at it and see what you can do yourself.

I hope that my points come across to you and you make some changes, reduce your consumption and save money (+ the planet).

Thanks, GFF

10 Comments

  1. “those that … have chosen a life that makes them dependent on petrol power transport for everything”

    We were wiser. We chose to live so that we could cycle almost everywhere. And for decades we did.

    But then my knee packed in so I couldn’t cycle. My back packed in so that I can neither walk nor use my electric bike. My wife’s hip stopped her cycling too. What would you have us do but use a car?

    As the population ages there will be more and more people like us.

    Liked by 1 person

    1. Seems like an electric wheelchair is the solution!

      More seriously, you raise a good point – I have a relative in their 70s with Huntington’s disease who lives 20 minutes drive from civilization and further still to a doctor’s or hospital. He still drives but for now much longer?
      The answer might be face timing your GP, medicines by drone or autopilot car.

      It’s a problem that will only get bigger as you point out. The solution isn’t ban all cars but it’ll be different from the status quo – either by nudge or push.

      Like

  2. I qualified for a free bus pass last year and now use it to save on car journeys. £5 billion towards a free bus pass for all could make a difference to congestion and pollution particularly as buses are updated to electric. Don’t suppose Rishi and chums like the idea of riding public transport!

    Liked by 1 person

    1. I agree with free public transport for all – my son only just got his free bus pass (he’s 5 and free in Scotland) but why should one group get free bus passes over another?
      The free 5-22 bus pass is estimated to cost £132m for Scotland a year so £1.5b for England and Wales? Doesn’t sound extortionate?

      Still,.you can see where their priorities lie by their actions.

      Like

  3. When we visited Auckland we thought we’d try their free bus service. Forget it: it was packed with students avoiding what would have been a tolerable walk for them, so that middle-aged visitors to the city couldn’t get a seat.

    Free anything is a lousy idea.

    Like

    1. At least your journey wasn’t too long due to less congestion from there being fewer cars on the road?

      Free anything?
      Free pensions for the old?
      Free school between 5-16
      Free winter fuel allowance?
      Free child benefit?
      Free radio (Radio 4)?
      Free roads (in yer electric car)?
      Free parks and museums?
      Free bus passes for the over 50?
      Free libraries?
      Free NHS?

      Of course there’s a cost to these free things but if it’s a socialist good, why not just make it free – the overall benefits are worth it.

      Like

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