What the fuck business is it of yours, matey?

Petrol companies and supermarkets are to be warned for the first time by the Treasury that they must pass on price cuts to motorists.

Danny Alexander, the Chief Secretary to the Treasury, will write to all of the main fuel suppliers and distributors to demand that they pass on the benefits of falling oil prices to customers “as quickly as possible”.

I beg your pardon?

When did we return to a socialist economy where Ministers decide the price of things?

We have this interesting thing, this *market* that decides these for us.

So fuck off and go back to preparing to lose your job in May.

32 thoughts on “What the fuck business is it of yours, matey?”

  1. If you were basically qualified to be a park press officer you’d be pretty scared at the prospect of having to give up the limo and the TV interviews and go back to writing stuff that gets filed in the bin yourself.

    Whether you would be prepared to attempt to skew an entire market and mess with sixty million people’s lives just to avoid that fate only you can say.

    If you answered ‘yes’ report to the nearest party political office in town (colour irrelevant) and sign up as a candidate.

    If you also have delusions of relevance and a God complex, fast-tracking awaits.

    PS Narrative again. This will have no effect but wil allow the Lib Dems to blame the capitalists and the Tories.

  2. Ministers deciding the price of things?

    No, merely a Minister writing to companies telling them what he thinks the price of things should be. If this was a regulated sector, it would be a lot more sinister. As it is, it is a “keep my name in the press” tactic which the companies are perfectly within their rights to ignore.

    Plus what the Stigler and Interested have already said.

  3. I have no idea why petrol retailers don’t provide itemised receipts.

    For example,

    “You paid £79.80 total, consisting of:
    £34.80 Duty
    £13.80 VAT (inc VAT on Duty)
    £28.20 Price of Petrol
    £1.40 Delivery
    £1.60 Retailer

    (figures approximate)

  4. Margaret Hodge has been running a pre-election propaganda campaign for the last four years. Why shouldn’t Danny Alexander start one a few months before the election?

  5. Pump prices have been falling. At approximately the same rate as the price of crude, so what;s the issue?

    Beyond getting a headline designed to appeal to the ignorant

  6. @Snag ‘I have no idea why petrol retailers don’t provide itemised receipts.’

    I’ve often thought that. I think it must be that – having contact at high levels with govt – they know what vicious and corrupt weasels politicians are, and would rather take the occasional bit of juvenile PR (see above) than endure a full price-fixing/other commission.

    (Maybe they are also fixing prices and back-handering MPs, and the whole thing is like a village panto, with lots of nods and winks)

  7. Village pantos are generally better organised.

    Not least because people generally know what they are doing and are mostly committed to providing the best result for the customer (okay, the customers’ children) with the limited resources available.

  8. Maybe I’ve missed something but aren’t prices a few pence per litre cheaper than they were a month or so ago ?

    I guess there are a lot of forward contracts and so on involved anyway.

  9. Beaker’s complaint is that crude prices have dropped 25% while pump prices have dropped 6% and that can’t be right, or can it?

    let’s get out the old fag packet and work it out on the back thereof. Crude prices are in dollars but sterling has fallen 7% since the summer whereas the crude price has fallen 25%, so in sterling terms the crude price has only fallen 18%.

    The price of petrol is around 124p (was 135p), but of that price we know that 57.9p is duty and VAT on the whole shebang is 20% so the ex VAT price is 104p (was c.112p), less the 57.9p and 10p for refining and another 6p for distribution and profit and we have approximately 40p of the 132p cost coming from the oil itself, i.e. less than 1/3rd.

    So how much would we expect the price of petrol to drop? I would say less than 1/3rd of 18%, which, Holy Shit Batman, is what has happened.

    A career in forestry PR beckons.

  10. It reinforces the narrative that petrol is expensive because evil oil companies are fleecing citizens, whereas the reality is that the government is fleecing citizens.

  11. GeoffH, Paul, Alex,

    There’s always a delay between the fall in crude oil prices and the fall in pump prices. It’s partly to do with fancy things like forward contracts, but mostly just the basics of bringing the oil to the refinery, refining it, loading the petrol & diesel onto tankers, and depositing it at your local petrol station. From the various tanker drivers’ strikes we’ve seen, we know that the average petrol station holds 2-3 days of stock; there are also stocks at both the input and output ends of the refinery. Finally the retailer has every incentive to delay cutting prices until other retailers nearby cut theirs too. All told there’s at least a fortnight of delays between input costs falling and output costs falling.

  12. I very much doubt that Osborne’s wanst pump prices down because of the damage the loss of tax would do his budget. Petrol/ VED accounts for about 2% of tax revenue, so 25%* fall on that would be quite a chunk of change.

    @ GeoffH: Pump has not fallen along with crude, or would be about £1 per litre.

    (* Brent was $115 with cable @ $1.7 today Brent is $83 and cable at $1.6)

  13. @John Miller

    ‘Really, is there any other sport where you can be absolutely fucking useless and still play at the top?’

    Mike Smith played one Test match.

    He scored 0 and 4*, and took 0 wickets in 23 overs.

    That said, he never played again, so I suppose you make a fair point.

  14. MadNumismatist,

    > I very much doubt that Osborne’s wanst pump prices down because of the damage the loss of tax would do his budget. Petrol/ VED accounts for about 2% of tax revenue, so 25%* fall on that would be quite a chunk of change.

    Petrol duty isn’t a percentage; it’s a fixed number of pence per litre. So a drop in pump prices should actually lead to an increase in Treasury revenue.

  15. Yep didn’t Thorpe drop the opener (Elliott?) off Smith when he was on about 30 and he went on to get 175 or something?

    Gavin Hamilton crikey I had forgotten him, and now I remember why. Martin McCague? Darren Pattinson? As an alleged top order bat Aftab Habib takes no beating whatsoever, averaging around 8.

    Where have we found these people? Hanging around the ground?

  16. >Petrol duty isn’t a percentage; it’s a fixed number of pence per litre. So a drop in pump prices should actually lead to an increase in Treasury revenue.

    However the VAT charged is – thus if petrol got significantly cheaper, it would make a nasty hole in the budget figures,
    (This is already proving somewhat of a problem for the government as with small cars now doing 60-70mpg rather than 30-40mpg, petrol consumption has dropped (and is continuing to drop) significantly, and petrol taxes are falling alongside it…

  17. @ the Prole
    Lower petrol consumption is more benefit than cost in the UK as it helps the balance of payments which is why the government has pushing it as long as I can remember and the Austin A30 did 50 mpg 60 years ago.
    VAT on petrol is much smaller than duties and any loss of VAT will be more than balanced by reduced expenditure on index-linked pensions as a result of the lower inflation rate.

  18. bloke (not) in spain

    ” I can remember and the Austin A30 did 50 mpg 60 years ago.”
    Curious how the myth of old car frugality continues. The best the old A series did in it’s 800cc incarnation was in the mid 40s mpg in the A30 shell. Might have squeezed a little more with a different diff, but you’d be limited to driving round Lincolnshire..
    For some unaccountable reason spent some years messing about with A series. We built up cars & engines for various competition formulas & “production” was the toughest. Basically, you “blue-print” an engine to the absolute limits of the manufacturer’s specification. Choose the loosest, bearing set up with the thinnest oil. The largest cam-lobes within the parameters. Radius & polish everything could be radiused & polished from the nasty little SU’s (& A30s had Zeniths!) to the restrictive exhaust ports. And that’s all about making the engine run more efficiently. Because with tuning, you’re interested in getting the maximum power out of the same amount of juice, before you start feeding the beast more juice .Ex-factory A’s were thoroughly agricultural, so there was plenty of scope.
    But you can’t get round A30s had underpowered, low compression engines running primitive ignition systems through open ratio-ed gearboxes. Dragging round hefty 50s tin. With the aerodynamics of a brick. Pretty well the opposite of a modern, frugal micro.

  19. @ b(n)is
    At the times adverts in the paper boasted about 50 mpg, which was pretty good for its era and hence a selling point.Petrol rationing didn’t end until 1950. The A30 was launched in 1951 but was designed during rationing and was much lighter than its rivals as it was one of the first to have a monocoque body.
    “A30s had underpowered, low compression engines running primitive ignition systems through open ratio-ed gearboxes. Dragging round hefty 50s tin. With the aerodynamics of a brick. Pretty well the opposite of a modern, frugal micro.”
    Up to a point Lord Copper – not so much hefty tin as most models and wiki says that it had average mpg of 42 (which makes the claim of 50 mpg at 40 mph sound plausible) – and that a Zafira has an average of 37.4.

  20. > However the VAT charged is – thus if petrol got significantly cheaper, it would make a nasty hole in the budget figures,

    Most of the VAT is on the duty, so I’d say it was more of a pathetic dip than a nasty hole.

    > (This is already proving somewhat of a problem for the government as with small cars now doing 60-70mpg rather than 30-40mpg, petrol consumption has dropped (and is continuing to drop) significantly, and petrol taxes are falling alongside it…

    Since the purpose of petrol taxes is to decrease petrol consumption, why would decreased petrol consumption be a problem for the government? By “problem” do you mean “achievement”?

  21. S2

    “Since the purpose of petrol taxes is to decrease petrol consumption”

    Ahh.. So this must be Tim’s carbon tax..;)

    I thought the point was to take “more that can then be pissed against the wall”…

  22. @ PF
    Several Arab potentates were miffed when the UK government responded to a doubling in crude prices by *raising* instead of cutting (as, I think, France did) petrol duty. Squander Two is right.

  23. John77

    Apols if brain not functioning today:

    Arabs (or markets) double the price.

    Ie price goes up, hence, the result will be to cut demand and hence cut the duty to the UK Gov’t (same duty per litre, but less volume (bit of extra VAT on the raw price rise)).

    Gov’t then also puts up duty (if I understood you correctly).

    OK, sure, I accept that theoretically it’s perfectly feasible that UK gov’t may have wanted to decrease demand even further?

    But are you telling me that “more dosh” (ie to offset the lower duty from the reduction in demand) wasn’t a primary motive? Just curious?

  24. @ PF
    Yes – at most tertiary.
    Firstly this was an era with fixed exchange rates so Balance of Payments was a bit *more* important than the actual (as distinct from predicted) budget balance.
    Secondly, the UK government wanted to discourage the Arab governments from trying to appropriate more of the wealth that had been generated by western oil companies discovering and developing oil fields in the Middle East. You should remember that at that time the UK government owned a majority of BP which was the largest single producer of oil from the Middle East – so much so that it sold over half its production to other oil companies to refine and market! BP produced far more olil than the UK consumed and HMG’s share of BP’s profits were, before the 1970s, bigger than the net benefit from petrol duty.
    Thirdly, large amounts of fuel were used by or recharged to corporations, who paid a high rate of tax (around 40%, I think) so the net extra revenue to HM Treasury was not as big as you might expect.

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