Economic rationality from this government!
A stepping up by the Government, along with its international partners, of pressure on the Opec oil-exporting countries to increase production, forcing down fuel prices. A Whitehall source said: "Our hands are tied a bit here – if we cut petrol taxes there is no guarantee the savings would be passed on to the motorist."
Compare and contrast that with McCain\’s and Clinton\’s glib assumption that cutting the gas tax would pass straight through to consumers. For the answer is, of course, that it depends.
“if we cut petrol taxes there is no guarantee the savings would be passed on to the motorist.”
Well there’s no guarantee, but if we assume that no-one does, it only takes ONE retailer to think “I can steal some market share here” and …
With elastic supply and inelastic demand and a base-line world price that is unaffected by any individual country’s tax level, the chances are that nearly all the tax is borne by the consumer, ergo, tax cuts would nearly all go straight through into lower pump prices.