Too Much Stick And Not Enough Carrot – Taxing People Off The Road Is Unfair And Premature, Says Consumer Council
Thursday 18 March 2010
Northern Ireland’s consumers are being punished with rising petrol and diesel prices before there are universally available, fully accessible alternatives to the car in place, the Consumer Council has said.
Aodhan O’Donnell, Head of Transport at the Consumer Council said: “Government duty and tax account for almost 70 per cent of the cost of petrol and diesel. If that was used to support public transport or sustainable travel programmes, consumers could potentially get on board, but it is not, it is just a general taxation.”
The comments come as prices are set to exceed 120 pence per litre, when the third fuel duty increase since last April comes into force on 1 April 2010 [a], bringing prices close to the peaks of July 2008 [b].
“Fuel prices have been rising steadily since January 2009 [c],” continued Aodhan. “In March 2010 it costs a family with one vehicle £12 more to fill with petrol and £8.49 more to fill with diesel than it did in March 2009. Based on an average of two fills a month that’s an extra £288 a year for petrol and £204 for diesel a family has to fork out [d]. And of course it’s not just motorists who are suffering; all our freight and goods are moved by road so it is affecting an already struggling haulage industry. The higher costs it faces in turn filter through to consumers in the form of increased prices for goods.
“The Consumer Council recognises and promotes sustainable travel initiatives and we believe people should be encouraged to use their cars less, but right now we are seeing lots of stick and very little carrot. While there have been great strides in improving public transport, alternatives to the car just aren’t there for everyone. And unfortunately it’s not a simple case of urging people who do have access to public transport to use it more often, as fuel increases often lead to fare increases, which we saw during the last peaks in 2008.
“The Consumer Council recognises that the weakness of sterling is adding to the problem and that wholesale costs are increasing [e]. But all countries are facing increased wholesale costs and yet in Northern Ireland we pay slightly more than the rest of the UK and RoI, and UK fuel prices are among the most expensive in Europe [f]. The Government is not helping consumers by increasing duty at this time. Consumers also need a better explanation from the oil industry; they need more information than the simple argument that prices are related to global markets and supply and demand,” concluded Aodhan.
The Consumer Council continues to monitor and publish weekly the cheapest, average and dearest prices for petrol and diesel in various areas in Northern Ireland on its website. Consumers are encouraged to visit www.consumercouncil.org.uk and to shop around for the best deal. The Consumer Council regularly briefs MLAs, MPs and MEPs, setting out the key issues and trends, and the action needed at local and European level. It also calls on Sainsbury’s and Tesco to charge all its customers the same prices for petrol and diesel, rather than up to a 4ppl difference depending on where they live.
- Consumer Council media contact: Keelin Kelly, telephone, 028 9067 4807 or or e-mail, kkelly@consumercouncil.org.uk
- The Consumer Council is an independent consumer organisation, working to bring about change to benefit Northern Ireland’s consumers. The Council campaigns for high standards of service and protection and a fair deal for all. It also carries out research, gives advice and publishes reports and other publications. It deals with individual complaints about buses, trains, planes, ferries, natural gas, electricity, coal and water.
- For more information, visit our website at www.consumercouncil.org.uk
[a]The April increase will represent the 3rd hike in fuel duty since April last year. It is due to go up 1ppl + inflation = approx 3ppl. Fuel Duty has already gone up 4ppl since April 2009. Until April 2009 fuel duty was charged at 52.35ppl. By September, following two increases, it went to 56.19ppl. The last Budget said fuel duty would go up 1ppl on 1 April every year between 2010 and 2013. On top of this VAT returned to 17.5% in January 2010. If the increases mentioned go ahead we will have seen fuel duty increase by around 7/8ppl in the last year – whilst also seeing VAT return to full rate.
[b]Both petrol and diesel are edging toward 120ppl and will be pushed over the 120ppl mark if the fuel duty increase goes ahead at the start of April. This is getting close to the peak price we saw for petrol (120.1ppl) and diesel 133.6ppl in July 2008 when crude oil was at $136 (and peaked at $147).
[c]Apart from minor falls fuel prices have been on a steady rise since January 2009. In Jan 2009 diesel was 97.9ppl and petrol 85.5ppl.
| Petrol | (Tank Fill) | Diesel | (Tank Fill) | |
| Mar 2010 | 114.93ppl
| £57.47 | 116.0ppl | £58.00 |
| Jan 2010 | 109.94ppl
| £54.97 | 112.12ppl | £55.60 |
| Mar 2009 | 90.94ppl
| £45.47 | 99.02ppl | £49.51 |
[e]Since Jan 2010 crude oil has been fluctuating between $70 -80 but sterling has weakened against the dollar which has a negative impact. The wholesale cost of petrol has increased by 16per cent in the last month alone. (Wholesale cost is the cost borne by the refinery - to refine petrol and diesel from crude oil -$675 dollars a tonne in Feb, $788 dollars at the end of last week). While crude oil in dollars has fluctuated close to the $80 mark, in sterling the cost of crude has gone up from £45 to £54. In Aug 2008 petrol was 114.5ppl and diesel 127.9ppl. This was when crude traded at $113 or £59.92 when converted to sterling. Last week petrol was 114.93ppl and diesel was 116.0ppl. Crude was trading a lot less at $80 but because of the exchange rate it still was trading at £53 (so crude in dollars had dropped $33 but only £7 in sterling).
[f]It is recognised that UK fuel prices are amongst the most expensive in Europe but in NI we pay slightly more than rest of UK and ROI. Petrolis approx 1-2ppl more expensive than in Scotland, England and Wales. On average petrol in NI is around 6ppl more than in RoI.Dieselis approx 1ppl more expensive than in Scotland, England and Wales. On average diesel in NI is around 14ppl more than in RoI.
