"How much?" Topic

Filled the car up this morning.

£140.90 GBP a litre.

That's £6.40 GBP a UK gallon (or $8.40 USD per US gallon).

And most of it is government tax.

Do they not realise that this increases the costs of everything? (as it all needs to be transported)

£140.90 GBP/litre?

ouch.

Do they not realise that this increases the costs of everything?

Of course they do. What's your proposed replacement in tax or spending cuts…?

The market speculators are the new manor lords.
--
Tim

Sorry, £1.00 GBP 40.9p/litre :-)

What's your proposed replacement in tax or spending cuts…?

Well, that is of course the problem. The government seem to have decided toll roads may be the answer. I wonder if they would then reduce fuel duty? :-)

Lol. Get a bike.

I do 50 miles a day and have to drop the kids at school halfway round that. I think a bike would kill me within a week. :-)

You need something to pay for all that free medicine.

I was in Norwich yesterday and passed a statiuon where it was £1.43 GBP.9 a litre. Happily, the people I work for pay me for anything over 30 miles a day, so I get some of mine back.

They think that cars should only be for the rich.

As all the people who make laws are rich, they see no problem there.

On the bright side, ours is only about half the cost of yours, nowadays. We're catching up.
-Kle.

That's £6.40 GBP GBP a UK gallon (or $8.40 USD USD per US gallon).

Ouch! And I thought we had it bad! In the US, the average price per gallon is still less than half that!

What's your proposed replacement in tax or spending cuts…?

Yes, but a lot of that cost is taxes – and % based taxes at that. Not everything is as volatile in price as oil. Flat per-liter taxes would give a predictable revenue stream and not double or triple the impact of a given absolute increase in price.

Thing is if fuel goes up, so does the price of bread, milk, chocolate biscuits…

…and the bread will lose out first.

Most of it is flat – the VAT is percentage, but fuel duty is charged per litre…. Tax adds 20% to any increase in fuel prices from other causes (eg. oil prices) which is still an arse, but hardly "double or triple the impact"….

Gas just topped $4 USD/gallon in these parts.

Luckily we have an election coming fairly soon. Gas prices this high are not going to make the elected officials very popular.

Just how exactly do you think elected officials are responsible for it…? Worth a read:

economist.com/node/21550265

Dom, don't cloud the issue with facts!

Sorry, what was I thinking…? ;-) I do genuinely find it mystifying that a nation that prides itself on a belief in the free market, has such a huge blind spot where petrol's concerned….

I feel your pain – I've got a 50 mile commute each day as well. We are looking for a much more fuel efficient vehicle, but haven't purchased one yet as the funds are not in the car so to speak.

We've looked at a hybrid, but it does take a lot of fuel to recover £20.00 GBPk.

Don't bother with a hybrid. I work for a very large car rental company and we have them on fleet. The petrol engine cuts in for about 98% of the time!

You get better fuel efficiency with a modern high-tech small diesel like a VW Polo or something.

I do 16 miles a day on average going to and from work, with the odd trip running the kids about – costs me about £50.00 GBP a week just for that – and it's as cheap as £1.36 GBP around here.

Common-rail turbo diesel.

Why I can't get these in every car in the USA, I've no idea. I'd love to have one in my minivan.

"Sorry, what was I thinking…? ;-) I do genuinely find it mystifying that a nation that prides itself on a belief in the free market, has such a huge blind spot where petrol's concerned…."

To enlighten the non-Brits, just what percentage of the price is tax (non free market) and what price is actual product price?

I was referring to the USA with that post. In Britain over half of the price of petrol is tax, not at all free market. In the US the lion's share of the price is simple market economics, yet it seems to be viewed as a political matter….

I believe the actual cost of fuel is about 35-36p/litre. The rest is tax and VAT

Thanks for the education.

Well, given that the US has the largest oil fields in the world, yet can't access them primarily due to government restrictions, yeah, in the US, it is a political matter. Supply and demand are indeed part of the equation, but when private enterprise is restricted in their ability to provide supply, you get artificially higher prices.

It also does not matter that increased access to existing supply would take years, as the price of oil is based on estimates of future supply and demand as much as current production and usage. Oil is a "futures commodity," with oil traders betting either that prices will go up (and so buying now) or betting that prices will go down (and so selling now, or possibly "selling short" which is a more complicated process but still essentially based on the same bet). It's just "buy low, sell high" only with oil, not stocks. Thus, if future production appears likely to increase significantly, the current value of oil as a tradeable commodity plunges, and the price of "petrol" at the pump recedes accordingly.

Econ 101, Adam Smith, Milt Friedman and all that. Q.E.D.

This gives an idea of the tax on fuel in the UK – note petrol prices have since gone off this scale!

abd.org.uk/taxtable.htm

Well, given that the US has the largest oil fields in the world

I'd love to see a reputable citation for *that* claim…. Hell the CIA (that well known anti-American organisation) says you're in 13th, with a tenth of Venezuela's reserves….
link

As for oil being a futures commodity, yes to an extent, but the oil market isn't just a big gambling game; unbelievably oil futures are actually mainly traded to reduce the uncertainty of costs actually getting the stuff delivered to burn, turn into plastics, etc. (If it was *just* a gambling game it would be utterly zero-sum, obviously enough, since every successful trade has a losing counterpart – the *point* of a futures market is to hedge out risks, so those exposed to volatile prices can indemnify themselves against some of the risks.) Additionally oil futures are typically traded in months, not the years or even decades that exploration and exploitation can take.

(Additionally bringing new production on stream doesn't automatically lead to lower prices anyway, as those nice folks at OPEC would almost certainly hack their production quota in response…. Saudi Arabia in particular is pumping the stuff out as fast as it ever has, and would probably welcome the downtime on some of its facilities….)

From what I have been reading, the price of gas in the US has little to do with the actual supply. The US is producing more oil today than it was say 5 years ago, thanks to domestic expansion of production. Additionally I recently read that for the first time in years the US has dipped below 50% of it's oil consumption from foreign sources. Finally, with current consumption levels and demand being lower than it has been, the US is a net exporter of refined petroleum (i.e. gas). The problem is of course worldwide demand from developing economies (i.e. China and India), and the threat to the worldwide supply by a certain regime (not to get into a political discussion here…)

Damon.

largest oil fields in the world

link

Looks like the US is the 3rd largest producer, behind Saudi and Russia. Note that they do not appear on the exporter list at all, meaning they use it all domestically, which ties in with them being the largest consumer.

It is also the largest importer, which kind of indicates that it can't have the largest oil fields in the world as it has to buy in about half of its need.

link

The largest oil field seems to be Ghawar Field in Saudi, with a capacity of 83 billion barrels (and declining at 8% per year). The nearest US field would seem to be Prudhoe Bay in Alaska, with a capacity of about 13 billion.

I notice that the UAE is the 8th largest producer. A programme the other day stated that UAE has only 10 years of oil left. I wonder where that leaves countries like the US and China (the largest consumers) when the oil runs out?

Or the rest of us I suppose, who rely on US and Chinese imports.

"Just how exactly do you think elected officials are responsible for it…?"

oddly enough i don't remember articles of this sort when prices spiked under Bush.

The US has some hugh oil reserves, but the current administration is refusing to issue permits for the exploration and extraction of these fields. They also shut down drilling in the Gulf after the BP disaster though it turned out to be a far smaller event than many feared.

The current increase in domestic production is from private fields and permits issued by the Bush administaration.

Additionally, we haven't produced a new oil refinary since the late 70s and the EPA, current administartion, and various lawsuits mean we won't be building a new one anytime soon.

So yes, a very large chunk of it is indeed politics.

As far as having the largets oil fields in the world, I don't know if we do or not, I will point out there's a difference between fields and production. We may have the largest fields, but we're not being allowed to go get it.

Just how exactly do you think elected officials are responsible for it…?

They aren't, except perhaps in the most tenuous possible way.

Doesn't mean the OP's statement about fuel prices making them unpopular is any less accurate. Same thing with the economy… the Feds have very little ability to influence it in a rapid, positive way, but everybody loves a scapegoat.
-Kle.

There is an accepted definition of "Proven" reserves which involves economic and POLITICAL conditions. So when the CIA has a list of "proven" reserves, they may or may not be counting reserves that are legally protected from being exploited.

From cross referencing the CIA data with other sites that give an exact definition, it appears the CIA site is only counting currently exploitable. So it's entirely possible that the US would have huge reserves but since they are not exploitable from a legal/political aspect, they are not counted and therefore we end up much lower than we really are.

But all that said the point is the US has reserves we do not tap because of the political decisions. So Parzival wins the point.

Pictors – you do realise Federal spending on health per head is approximately the same as the UK.

What annoys me is when the sellers always blame the Treasury/Tax. Duty is raised once per year, but petrol has gone up monthly for the past year.

To US TMP'ers yeah yeah we get it, its all Obama's fault. Now shut up or take it to the Fez. Them's the rules.

To US TMP'ers yeah yeah we get it, its all Obama's fault. Now shut up or take it to the Fez. Them's the rules.

Awfully broad brush you're painting with, there…
Besides, if you want to get all "take it to the fez", the entire thread is about politics, from the very first post. It complains about taxes, which are a political issue.
-Kle.

"….and the price of "petrol" at the pump recedes accordingly."

Ha ha ha haa ahah aha haah….. Ahem.

In what world does that ever happen?

In our latest budget, a rise of 3.2p/litre from 1 August.

In response, the two petrol stations near me immediately put it up by 1p/litre. No doubt plus anpther 3.2p/litre in August.

Blaming the oil futures market MAKES IT POLITICAL because of the stranglehold elected officials have on approving who can and cannot drill or extract and where they may or may not do it.

I have to risk Fez to provide the most glaring pair of examples: OPEC and the gas lines of the 1970's due to Carter and his severely limiting domestic supplies, countered by a sudden drop in price & availability of fuel when Reagan got in and declared he would more than double approved domestic drilling. More recently, Obama shutting down approvals for US deep water drilling in the Caribbean and south Atlantic, but then guaranteeing massive loans for foreign nations to drill in the same places not approved for new US drilling (among many other "increased regulation" examples that have impacted for good or bad and effected decision-making by investors.)

Both examples had a PROFOUND effect on investors and their future projections and therefore HEAVILY influenced their decisions to invest or not, MAKING the situation political.

Please note: Just the facts, there, no value judgments, so I think I'm clean.

The Obama Administration Outlaws New Coal-Fired Powerplants
link

Bet this has no effect on energy prices either, right?

This sounds like the UK. No real power generation plants built for twenty years (the windmills don't count). The existing generating plant wearing out. A depedence on imported gas.

One difference this is not result of government policy. Unless you count privatising UK power generation.