George Osbourne’s budget featured a 1p reduction on fuel duty as a step towards easing the burden on the beleaguered British motorist. However ‘good’ this news is though, the fact that there will be a £2bn tax grab from the oil companies probably means that they will increase their prices resulting in an outcome that will surpass the 1p let-off anyway at the pumps.

Last year, the hot topic was a focus on environmentally friendly alternatives. This however creates a problem in itself, the OBR (Office for Budget Responsibility) having adjusted forecast tax revenue from fuel duty by £500m as a direct result of improved efficiency in vehicles on the road today. Where will this gap be plugged as automotive manufacturers chase the holy grail of clean, cheap, reliable and renewable energy sources?

This will also have a knock-on effect on the “fuel in the tank of the economy” for the automotive industry in so far as consumers have started to move towards smaller engine vehicles to directly combat the impact at the pumps. It feels like a vicious circle that no matter what way you spin it, the government will still need the taxation and ultimately the man or woman on the street will pay.

In a trip to the US only last week, I found it very amusing when I spotted someone at a filling station taking a photograph of the price at the pump. When I asked him what he was doing, he responded that nobody back home would believe how expensive the petrol was at $4 a gallon. It’s all relative, but to him it was a total rip-off and in our brief exchange he couldn’t believe how much on average we were paying. It certainly cheered him up!

I took the inset photograph as I liked the name of the station – “Terrible’s”. With this topic in mind, I thought it was very relevant to include it here. At $3.69 per gallon of unleaded, it works out at £0.50 per litre. Not that terrible if you ask me…

Do you think that it is all too much fuss about nothing and that the price is the price and a couple of quid per tank is nothing to worry about?
Would you feel more comfortable if the service stations flew a jolly roger or wore masks as they took payment?

There is of course another angle here, if the duty on fuel wasn’t so large, where would you propose that the taxation comes from? Let me know your answers to the questions posed in the comments!