Osborne: "let Families Benefit" From Low Oil Prices....

[ToraToraTora]

http://www.bbc.co.uk/news/uk-politics-30704197
Right oh George, I assume you will be dropping the tax then. Tax is at least 58p+Vat so even if it was free it would be just under 70p.

[ichkeria]

I assume even Osborne isn't moronic enough to reduce the tax on something whose price is falling.
If anything he should be raising it :-)
Let the poor eat cake for a while, as he says. What is wrong with that?

[Gromit]

The tax is calculated on a % of the sale price, so as the price drops, the amount of tax drops.

Osborne will lose £billions in revenue over this.

British oil firms will go bankrupt or have to merge.

Many jobs have already gone.

- So not great news really.

[ToraToraTora]

no it is not gromit. it's 58p + vat on the total not a percentage

[Gromit]

Tora, you are correct, I missed the change in 2011.

That was a sleight of hand by Osborne wasn't it...

// Introduced to control fuel costs (as far as is possible) by avoiding automatic increases in fuel duty as long as oil prices remain high. Revenues lost by the introduction of the stabiliser are balanced by increasing tax on North Sea oil revenues. Any increase in fuel duty is only permitted when, and if, oil prices fall. //

So Osborne fixed the level of revenue, but reserved the right to increase it if oil prices fell. And he called it the 'Fair' Fuel Futy Stabliser.

[Gromit]

Duty

[ToraToraTora]

well these conditions would appear to be ripe for a tax increase but I think it's a bit rich telling evryone else not to hike it to take advantage of the drop in oil prices.

[Gromit]

Osborne has to take it on the chin. He will have to forfeit his right to increase duty because to do so would be electoral suicide.

// Any increase in fuel duty is only permitted when, and if, oil prices fall. //

Isn't that barmy? That was never going to work was it?

[youngmafbog]

Not unless you didnt want to be re elected Gromit.

[Zacs-Master]

TTT, what would your question title have been if George had said "Chancellor George Osborne has warned it is "vital" for the oil companies to keep the price high so that there is no loss of income to the government"?

[ToraToraTora]

no diferent, zacs because fuel duty is not a percentage it's a fixed price per litre the price is irrelevant beyond political concerns. They could raise it to £10 on the forcourt but the duty would be 58p, more VAT though. Anyway I would welcome higher prices for myself but this post is not based on selfish concerns.