I am in the fortunate position that I do not have to drive anywhere near as often as I used to.  Getting through a couple of tanks of petrol a week was not unheard of in my last role.

Therefore I have not been hit particularly hard by the steady rise in the price of petrol in the last year or so.  So I tended to ignore it, like most social issues that do not directly affect me.

But, I recently filled up at a cost of over £60 for the first time, and after a long debate with the forecourt manager where he convinced me they had not, in fact, made a mistake, I decided to look into what makes today’s petrol so expensive.  After all, the price of crude oil is dropping quite quickly at the moment.

An average 115p litre of unleaded petrol is broken down like this:

50.35p on fuel duty
37.35p on the product itself
17.13p on VAT
10.17p for the retailer

Now, I understand the arguments for fuel duties, I really do.  Some of them I agree with, others I do not.  What I do not understand however is how the Government can tax us on the tax we are already paying.

You see, I was under the impression that the VAT (‘Value Added’ Tax) should only be applied to that part of the price in which I am paying for, well, “additional value”?  i.e. the product and the service that is delivered it to me?  Whereas in effect they are benefiting twice by raising fuel duties, once with the duty itself, and secondly by the increased VAT charged upon it.

I hope someone out there cleverer than me can surely explain why this is not illegal?

Or maybe it is?

I just wish someone would hurry up and invent the solar powered BMW.  Though they would surely find a way to tax sunshine the day that happens.  It might not even be the first time.

fuel duty · Government · petrol · tax · VAT