What's causing the current rise in the cost of fuel in the UK?

Question

What's causing the current rise in the cost of fuel in the UK?

Answer 1

the lack of cheap fuel globally

the downfall of the us economy

the lack of fuel

Answer 2

George Bush is not eating food anymore, he likes Iraqi oil instead...

To see how dumb he is, think from what moment the oil price started to climb in the clouds!? Right after the invasion in Iraq, Bush brought USA in recession and the rest of the countries in a important crisis...

Answer 3

Supply and demand, unfortunately. Demand for oil has shot up, just as everyone's realizing that there's not much left. Get used to it, it's not going down in price again...

Answer 4

It is mostly increases in taxes from this useless Government.

Oil prices are rising as well.  

This is because of increased demand, particularly from China.

Diminishing reserves of oil.

Increased costs of extraction, as the remain oil is harder to reach and transport.

Conflict in the Middle East and Venezuela.

Stockpiling by speculators.  This is having a significant effect on price, but cannot continue for long.

When oil prices rise it increases demand for alternative fuels, so the price of all fuel goes up.

Answer 5

the lack of obtaining fuel around the world

Answer 6

air polution and global warming

Answer 7

The GBP is depreciating, and fuel costs are rising due to more demand from developing economies such as China and India. Prices rise because of more demand and an ever decreasing supply.

Answer 8

How anyone can blame this particular government for high fuel tax is beyond me. Every government has taxed fuel to the hilt. It seems higher today because the raw material has gone up in price. The Arabs are keeping their oil and forcing brokers to pay over the odds. These costs pass on to consumers, just like when any raw material goes up in price.

Answer 9

world scarcity, threats to production in nigeria, speculationon oil reserve limits, speculative futures buying by airlines, added to that is productivity growth in china/india, and general increased demand worldwide.

Answer 10

Gordon Brown and Move Over Darling's tax policies and the price of oil. You see, there are 2 taxes on fuel, there's fuel duty of around 53p a litre and VAT is then charged on the total price, including the actual price of the fuel and the duty.

So as oil prices rise, the total cost of the fuel on which VAT is charged increases, resulting in more VAT being charged on the higher price. Add in the 53p fuel duty and it works out that around 78% of the cost of a litre of fuel is tax.

So basically they've been coining it from VAT receipts from higher prices and although they've just announced that they're freezing the latest 2p rise in fuel duty, they're fooling no one, certainly not the hard-pressed motorist.

I agree that the oil price increase is due to supply and demand and not much can be done about that in the short term at least, but as I've said the high price of fuel is mostly due to the level of tax charged on it.

And for every 13p that fuel rises in price, the extra tax the Government gets is about £1Bn, approximately the amount of extra revenue a 2p a litre increase would bring in.

And given that petrol has increased in price by about 27p a litre in the last year, it doesn't take much to do the math and see how much extra tax they're coining in.

Answer 11

incapability brown

Answer 12

Hi! The high price of oil in the UK is caused by three main things; demand, supply, and the Government.

1) First of all, you must understand that the global demand for oil is huge; we need it to transport goods, food and people .. all over the world. Even at home, we all need petrol to get to work, go shopping, drop kids off to school etc.. and because there are little alternatives (we can't change our car engines to run on water or gas), we heavily demand and rely upon oil. This of course means that oil suppliers will naturally exploit us - they know we need oil, so they try their level best to keep it's price high, so they make maximum money.

2) The way these oil suppliers actually manage to keep the price of oil high is by cutting back the supply of oil available to the market. In reality, there is much more oil right now than we think, but the Middle-East oil suppliers are only selling a limited amount of it to us, which means that oil is quite scarce. And when something is scarce, it's valuable - and so it's expensive. But then again, we must remember that although there is still oil left, it is a non-renewable resource that's running out.

3) In the UK in particular, the Government massively taxes oil, which is one of the main reasons for its high price. When you go to the pump, around 50-60p of what you pay per litre is in a petrol tax called fuel duty. Gordon Brown announced plans not to increase this duty by 2p a few days ago. On top of that, you also pay another tax (VAT) on petrol - I think it's something like 14-17.5%.

Overall it's suprising that over a half of what you pay at the pump goes straight to the Treasury, and recently this has attracted a lot of criticism - with many saying the Government should significantly reduce its fuel duty at such a difficult time. On the other hand, the Government has a very hard job right now; it's literally stuck for money. If it reduces fuel duty, inflation may cool down a bit - but then again the Government needs its money from somewhere. If it gives on one hand, it must take from elsewhere with the other.

And quick thing about inflation and oil prices. Basically inflation when prices of everything rise - which happens all the time. However right now, inflation is significantly high - when you go shopping at the supermarket you can see examples of this yourself. Inflation and oil prices are linked quite a bit; if the price of petrol is high, then the cost of transporting, producing plastics.. all increases which means that prices of good increase, so there's high inflation.

Answer 13

greed

Answer 14

this is a world problem, not little ole england