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It's not that simple...
Posted by TS [Email] (more from TS) on Sat, 23 Sep 2000 17:31:08
In Reply to: safeway fuel prices, L.Ward, Fri, 22 Sep 2000 15:34:30
What many people don't seem to appreciate is that the combination of high oil prices and high duty on fuel means that it costs Safeway and other retailers *more* than 79.9p to get a litre of petrol. Given that, how can anyone possibly expect them to sell at a loss? Most other retailers will increase their prices soon. They can't afford not to.
Put yourself in the shoes of a garage manager. What would you do? Carry on selling fuel at a loss, just to make some people happy, and go out of business is a month, or increase prices so that you can make a living?
The more important point is this. The UK government gets X amount of tax revenue. If duty on fuel was cut, the lost revenue would either have to be made up elsewhere (eg. higher income tax, VAT, etc), or public spending would have to be reduced. Any suggestions as to where the cuts should be made? Hospitals? Roads? Schools maybe?
Think about it. It isn't as simple as it is being made out to be. It is just the way our taxes are sturctured. It doesn't matter where the money gets collected, whether it is income tax, fuel tax, VAT, tobacco and alcohol, or anything else.
The American readers may find our fuel prices ridiculous, but it is just a redistribution of taxes. What you don't pay on fuel, you either pay elsewhere, or you lose in terms of public spending. You can't make money out of nothing. To spend it, on public services, you need to have collected it in the first place.
Sorry about the rant. I'm sick of people making out like it is a really simple situation, with a simple solution.
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