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It was even billed as a budget ‘to fuel growth’ , so it came as little surprise that the UK Chancellor opted to take some of the pressure off motorists this week by scrapping planned increases in fuel duty.
The planned inflation rise in fuel duty due in April is to be delayed until 2012 and the annual 1p above inflation ‘fuel escalator’ rise will be scrapped until 2015. These measures are to be paid for by a £2bn increase in extra taxes on North Sea oil firms.
Needless to say the oil firms are not best pleased about this development, suggesting the extra levy will deter further oil exploration. There protests tend to fall on deaf ears, because unless they pass the tax on at the pumps (and the Chancellor says he’ll watch this like a hawk), oil companies know too well that they have profiteered from motorists for years.
So should motorists be thankful even grateful about the Chancellors announcement? We think that the answer is much less clear cut than it seems.
On the face of it, struggling with petrol at over 130p per litre, any reduction in the cost of fuel is helpful for hard pressed families and individuals struggling to make ends meet in post-recession Britain. But with duty and VAT representing more than 60 per cent of the total cost of a litre, is the wool simply being pulled over our eyes?
Perhaps there is a more fundamental problem with our attitude to fuel prices and petrol consumption in the UK. It is a not so subtle difference in the way petrol is sold and the way fuel consumption is measured.
As petrol prices have shot above the £6 per gallon mark, many drivers have realised for the first time that their car’s Miles per Gallon (MPG) now represents just how far they can travel for that amount. But the difficulty in equating litres bought with miles driven has been a serious challenge for drivers over the years.
Manufacturers quote MPG when advertising new cars and when fitting trip computers, but distance and speed in the UK is measured using miles – so who exactly is to blame for this peculiarity?
Perhaps at the very least motorists could benefit from the option of adjusting their car’s trip computer to show miles per litre, rather than per mile. This seems to be a simple step that every manufacturer could take when preparing models for the UK market.
But with the rise in fuel prices set to continue and no likely change to trip computers in sight, we‘re going to give you helping hand in figuring out just how much it costs to fuel your car. To convert litres to gallons simply times the number of litres by 0.22. Using this ratio an average two door hatchback – with a 45 litre fuel tank – holds around 10 UK gallons, or an eye-watering £60 worth of petrol, an amount that is worth nearly £40 to the UK Treasury…