Financial News
- 4 October 2012, 8:07
Fuel Sales Slump Hurts Treasury In Recession
Plunging sales of fuel this spring even as pump prices dropped by 10p a litre is further proof that the market is failing, according to the AA.
It spoke out after official figures showed a 10.6% drop in sales, with almost 500 million fewer litres of petrol sold between April and June compared with the same period last year.
The figures, released by the Department of Energy and Climate Change, followed a near-120 million litre rise in petrol sales in the first three months when the tanker drivers' dispute led to some panic buying.
Edmund King, the AA's president, said: "Ever-increasing prices in recent years have sent petrol sales into steady decline and the panic-buying at the end of March may have brought forward sales in early April. Wet weather may also have played a part.
"However, petrol prices slumped more than 10p a litre, from the record of 142.48p a litre in mid April to the low-point of 131.19p at the end of June, and UK drivers began to travel further with lighter evenings, bank holidays and the Queen's diamond jubilee celebrations."
Mr King continued: "A fall of 2.27 billion litres in UK fuel sales over the first six months of this year compared to the same period in 2008 has got to bring some sense of reality to the fuel market and the Government."
He accused the fuel industry of trying to squeeze more money out of shrinking customer demand, pointing out that drivers and businesses had to pay 5p a litre more for diesel at a time in the early spring when wholesale costs were cheaper than petrol.
Mr King said: "Price transparency is the way forward: to ensure and show drivers that they are getting a fair deal at the pump."
Between June 2007 and June 2012, petrol prices have risen by 38% and diesel prices increased by 43%.
In September, the Office of Fair Trading announced an investigation into fuel pricing, to check whether falls in oil costs were being matched by falling pump prices.
The fall in sales is bad news for the Chancellor George Osborne as it means less taxpayer revenue from fuel duty as the Treasury's income suffers amid a weaker than expected economy.
what do you think?
Dave Harrison
Hardly surprising. When prices rise to excessive levels people cut back and look for ways to save money. Govt are forever telling us that high tax rates reduce income and that by cutting tax rates more people will pay up thus actually increasing treasury take. How about applying this logic to fuel duty George ??
John Andrew
so much for the fuel escalator that old Cameroon sprouted, that word rexpalins it all like most of everything that is said end of day a lot of hot wind,Gov wants as much as it can squeeze,even like fags and booze they know its an addiction and price hike with tax wont stop people smoking or drinking,but the good old campaign to get you to be healthy is to look like "we care",but to balance the ones that do it in taxes,same as with old nhs and drunk people,hold on few yrs ago slung in drunk tank at cop shop,nope not now all shipped to A&E,,think we should have a national strike day and shut the country down,
t.bulgin
ok, you start it then and well all join in later.
Windows Live User
Well they found out where the ceiling is. Push it up so high and my old car will just sit outside
Paul Grice
Buy less now and pay less in the future. If no one is buying then they have to store it then they can't ship it or refine it or pump Danny more of it the job implications are massive .the hit to the hard pressed world economy unthinkable .So the price has to fall Its never been a better time to tell them No we will not pay high prices any more
Jonathan Goodwin-Self
here I live in Essex the prices are very high. In fact all prices for everything has increased in 2 years by 50% but inflation is falling. Tax is increasing and mortgage rates, so this government is destroying the standard man
t.bulgin
50% in two years ! Thats Jupiter years yes ?
johnnydee23
My my higher price= less sold ! Cameron take note your draconian tax on fuel is doing its job
t.bulgin
Its not his tax, its a tax that has been there under labour and tory govs. do you think that if labour get in then this tax will disappear ? Im begining to think that your not really engaging your brain johnny.
Mike Drouin
not a new problem higher price = less sold no matter what the product ,on the plus side most people drive more carefully and use less fuel , i do computer trip always on mpg , but is this using less fuel just what we have been told to do so as to preserve the plannet .
les
8:56am on 3/10/2012
they (the gov't) say (or pretend) that they want us to use less fuel, be green, be ecofriendly!!! then we get this supposed 'bad news' that fuel sales are in steady decline!!! they should be jumpimg for joy. What, in fact, they really want is for everyone to smoke 40 fags a day, drive V8 gaz guzzling 4 x 4's so that they can squeeze max revenue from us.
Dave Harrison
9:05am on 3/10/2012
Exactly Les. Ciggies are a prime example. Every increase is " For your own good" but they are never increased to such an extent that price is actually a deterrent to smokers and the tax continues to roll in.