High fuel prices are crippling my business - considering that due to the current economic climate I have kept my daily labour rate the same as it was when a litre of fuel was 89p.
The cost of petrol now averages 140.20p a litre, with diesel at 146.72p a litre. And in August, another rise will add 3.62p a litre, meaning the typical 50-litre petrol refill will cost £1.81 more, the AA calculates.
However, petrol hasn’t always been this pricey. Five years ago it was just 89p for a litre of unleaded – and even in May 2009 the price was below £1 a litre, according to comparison site PetrolPrices.com.
It now cost drivers more than £68 to fill up a 50-litre tank – £3.45 more than it cost a year ago £12.30 more than in 2010. Meanwhile, larger cars and vans cost up to £100 a tank, says the AA.
What makes up the price of petrol?
According to Whatprice.co.uk, the forecourt price makes up just 5% of the total cost of petrol, while the cost of oil amounts to a further 32% - but of course it’s taxation that eats up the largest chunk, at a hefty 63% of the price you pay to fill up your car.
At 139.67p a litre, the cost of a litre of petrol breaks down into: 57.95p fuel duty, 23.28p VAT, 52p wholesale, 1.5p biofuel content – with just 4.94p the retailer’s margin and transport costs.
The government’s main argument for dropping the 50p tax rate is that the decrease will mean a bigger take in cash terms for the treasury.
If that is indeed the case, then surely the same should apply with a cut in the duty on fuel with road users filling up more frequently resulting in a bigger take for the treasury. IMHO such action may also provide the stimulation the economy needs and as a consequence kick-start growth.
