Fuelling inflation

3382 Comments | Add Comment | Blog entry posted 13th February, 2008

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Inflation is currently running at the highest level since June last year, and rising fuel costs are to blame – that’s the conclusion of the latest report on inflation by the Office of National Statistics (ONS).

The two indicators of inflation, the Consumer Prices Index (CPI) and the Retail Price Index (RPI), both show an increase. CPI puts inflation at 2.2%, up from 2.1% in December, while RPI shows inflation rose from 4% to 4.1% over the same period. It’s the fourth month in a row that inflation has exceeded the government’s target of 2%

The report points the finger at a number of factors including food and drink prices, but says “the largest upward pressure came from an increase in the price of road fuels.” The national average price of unleaded rose 1.3p in January alone, taking it to a total of 103.9p per litre. This time last year a litre of petrol cost 87.5p.

High fuel prices drive inflation because fuel is a fundamental to the infrastructure of the UK. Our food and basic goods are transported using it, and if the price goes up, so does the price of our goods. A small amount of inflation is healthy for the economy, but too much and we start to run into problems – missed mortgage payments, repossessions and unemployment.

Worse still, the report’s inflation figures don’t take into account the impact that the energy price rises in January will have, because the current model assumes it will take up to 4 months for the price rises to take effect. The full effects of inflation may also have been dampened by a decrease in clothing costs and cut-price offers on the High Street, which effectively offsets the problem of high food and fuel. Economists are warning that this, combined with two further 2p increases in fuel duty planned for April and October, will mean inflation will hit 3% by the end of the year.

The freight industry sent a letter this week to the Chancellor, asking him to scrap the 2p a litre increase planned for April, and in a letter to the Daily Telegraph, 11 leading business figures argued that they were being hit simultaneously by a slow down in the economy and rising fuel costs.

It said: “At 50.35p a litre, UK fuel duty for diesel and petrol is already the highest in Europe. Indeed UK diesel duty is double the EU average rate of 25p a litre. The chancellor now plans to increase this by 2p per litre from 1 April.”

“Such an increase will generate further serious difficulties for the transport and forecourt industries, business drivers, those dependent on the car, and for businesses or individuals in remote or rural areas with no alternative transport options.”

Have you noticed an increase in living costs? Are you worried about the effect that further inflation rises will have on you? Do you think the Bank of England is capable of controlling inflation?

Replies to Fuelling inflation

Darshan September 9, 2009

report reply to Darshan

Congratulations on a job well done. Thanks.
I am from Belgium and bad know English, give true I wrote the following sentence: "Lynette has quality petticoat to having nora and kayla around her and her marriage but throws her best."

Thanks for the help :-D, Darshan.

Tobey September 5, 2009

report reply to Tobey

Good evening! COOL SITE! NICE CONTENT! I WISH YOU SACCESS!.
I am from Bhutan and too bad know English, please tell me right I wrote the following sentence: " Best stocks to pick: they may occur high trading companies, some of which are about hedge."

Thanks ;). Tobey.

Azura April 6, 2009

report reply to Azura

Hi everyone. The radical of one century is the conservative of the next. The radical invents the views. When he has worn them out the conservative adopts them.
I am from Serbia and now teach English, please tell me right I wrote the following sentence: "Affordable airline tickets to maui, starting from."

Regards ;-) Azura.

Tony Lally July 22, 2008

report reply to Tony Lally

How typical of Tesco and Sainsburys to say they will 'match prices on a local basis', in other words where it is going to cost them business. In all other cases no doubt they will keep taking their customers for every penny they can! Motorists should boycott both supermarkets both for fuel and groceries until they reduce petrol prices for everyone including those not fortunate enough to have Asda or Morrisons nearby

Ashley Leaney June 17, 2008

report reply to Ashley Leaney

I believe that the cost of oil contributes only a very small part in the overall price of a gallon of petrol (or diesel).

The majority of the retail price is made up of tax, production costs (refining) and transportation and distribution - not to forget, PROFIT. Therefore, a doubling of the cost of oil should have only a very small effect on the final price of a gallon of fuel.

The massive price increase seen in the UK over the last years is largely a result of the petrol companies pushing the price up - with the main beneficiary (UK government) doing nothing to stop it. Why would they?

And where has all the extra revenue gone?

If anyone knows different, then tell us.

John Glover June 11, 2008

report reply to John Glover

Before Christmas Diesel per litre cost approximateltly £0.98 and was 4 pence per litre more expensive than unleaded fuel. Now Diesel costs approximately £1.30 per litre and costs around 12 pence per litre more than unleaded fuel and has done since late January 2008. Can anyone tell me why there is now this increased differential in price. Is it profiteering by the garages or fuel company's ? or am I being synical??

Ricky Comiskey May 5, 2008

report reply to Ricky Comiskey

45 pages of whinge and whine...

DO SOMETHING ABOUT IT OR SHUT UP!

Doomed. We're all doomed!

Labour Conned May 2, 2008

report reply to Labour Conned

All together now..........Hip Hip Hooray.

Labour has sufferd It's worse local election defeat in forty years, well done, and congratulations to all of us Great British people, we have given him the bloody nose he is long overdue for, lets give him a great big arse kicking out of No10 back up to his constituants in Scotland, shame we have got to endure two more years of his faild administration befor we get the opportunity to do so in the general election.

Labour Conned May 1, 2008

report reply to Labour Conned

It's local election day, so let's all give Broon the loser ( were the losers if we don't ) a bloody nose today and show him what we think of his inept administration by consigning all local labour councilors to the scrap heap.

Amir Alisic April 30, 2008

report reply to Amir Alisic

These petrol prices at the moment are just a joke at our expense and are carrying on to increase how are people going to be able to afford this when minimum wage is still staying the same.
But from what it seems the government does not care about the people of this country becasue they are just a bunch of money hungry idiots and they dont care about the middle class people of this country they are only looking out to make the rich happy. These increases in fuel csts must stop and decrease otherwise i will organise a petrol strike myself.
So a quick message to gordon brown and all of the other members of parliment if they some how get this f you very much.

Alsson April 22, 2008

report reply to Alsson

HI, COMMENT ONE, BENT MPs [READ YOUR NEWSPAPERS] STUFFING THEMSELVES AND THEIR FAMILIES WITH OUR MONEY DOES ANYONE REALLY THINK THAT ANY OF THEM CARE A HOOT ABOUT WHAT HAPPENS TO US THE SMALL SELF-EMPLOYED THE BACKBONE OF THIS COUNTRY???? COMMENT TWO, LONDONERS GIVE YOURSELVE HALF A CHANCE GET RID OF THIS CAR HATING IDIOT RED KEN, REGARDS TO ALL, AL.

Dawn Bowater April 20, 2008

report reply to Dawn Bowater

Has anyone noticed that diesel is now 10p more than unleaded? Last year this differential was 2p.

The stupid thing is that although diesel is a by product of petrol production if producers chose to alter their production methods to diesel rather than petrol then more diesel could be produced more cheaply than current combined output of petrol and diesel.

Modern diesels are cleaner and diesel itself is more sustainable than petrol. Why are diesel drivers being ripped off?

Labour Conned April 9, 2008

report reply to Labour Conned

Motorists are voters too, so lets remind Broon at the may local elections, by giving this snouts in the trough self serving so called government a trouncing, wich will be a taster of what he can expect when he has the balls to call a general election.

Bring it on Broon.

Alan Mitchell March 28, 2008

report reply to Alan Mitchell

I am disgusted at the continual rise in fuel prices, it seems to be on a daily basis now as opposed to monthly. Every time I put fuel in my car the price has gone up by a penny and sometimes more.
Time has come for the hauliers and farmers of this country to act as a body and blockade the fuel depots as they did before and bring this country to its knees and get rid of this shameful government. I always thought that a labour Government was for the working class, it seems I was wrong. I think I'll vote BNP next time, they'll sort it out.

James Taylor March 28, 2008

report reply to James Taylor

I am just fed up with some of the moneymaking schemes of this Government. The latest being, paying a £5 pound baggage charge to board an Aircraft when going on holiday. Common sense tells you that you must take a suitcase with you. Why suddenly pay for it now, when it has always been inclusive with your flight booking. As I say, another moneymaking scam!

Andy March 28, 2008

report reply to Andy

I'd happily support it because maybe then the government would sit up and listen.

Highway Robbery used to be a hangable offence

Andy March 28, 2008

report reply to Andy

People shouldn't be afraid of the government, the goverment should be afraid of it's people, for they are who put them in thier position, and can so easily take them out of said position in the next election.

It's about time we stood up and said no more.

When will the next fuel strikes hit? Because you can guarentee that WILL damage the economy. I'd happily support it.

Melanie Partridge March 23, 2008

report reply to Melanie Partridge

As a disabled single person I rely on my car for mobility (unable to use public transport , while Taxis prove too expensive).
I swim several times a week in order to maintain my mobility and manage my condition (M.S).
I retired from work 3yrs ago (due to ill health) and have found the cost of motoring (utilities, and food) has escalated to such a point that I am forced to consider rationing my trips to the gym, which may well result in increased disability.
I do not want pity or sympathy, however I would appriciate my freedom of movement to be non taxable, and not dependent on income.
I do receive £40 per week DLA towards running a car, this is a help but does not cover my true costs.
Does anyone feel my request unethical or unfair?

A.burton March 23, 2008

report reply to A.burton

I THINK ITS TIME TO EMIGRATE THATS WHAT THE GOVERMENT IS TELLING ME

Andy Gillam March 18, 2008

report reply to Andy Gillam

I live in a rural area and cannot do without a vehicle to get to work, my wife also works and she has the same problem. We do not drive lavish vehicles or gas guzzlers but the ever increasing costs are crippling. The government bang on about people using public transport but they want to try and use it where I live, there are about 3 buses a day and non correspond with working patterns, it's a disgrace. This whole government is a disgrace and it's about time they listened to their voters! I notice that they don't shy away from using their gas guzzling vehicles for even the shortese journeys, but it' always the same the little gut just has to pay for the lavish lifestyles of the big men!!!!

David Nicol March 17, 2008

report reply to David Nicol

As usual this Socialist (?) Government is a major cause of the Fuel Price problem rather than being responsible for seeking an equitable solution. If the duty were reduced by a sum equal to the additional vat being recovered on price increases then taxes on the poor would be stable and the super rice could make up the shortfall from their millions! In truth the running of Britain is too important to be left in the hands of these incompetant politicians and the civil service. If they showed the same generosity to the tax payers as they do to themselves this once great island would be a better place.

Roberta Peterson March 13, 2008

report reply to Roberta Peterson

Petrol prices are only a small part of the inflation equation, but one the government will eagerly embrace as it cannot be blamed for international oil prices. However, the main cause of inflation in the UK is unsustainable government overspending which strangles the economy and holds back productivity. However, high taxation, an inevitable result of high goverment overspend, is a significant cause of inflation, and fuel tax rises in particular have a strong inflationary influence due to their overall effect on all transport which in turn affects every comodity you buy. There is no easy answer, but goverment overspend must be cut and taxes lowered, but with the mess we are now in, that is not possible without lots of pain. Well done Brown and Darling!

Ray Pearce March 12, 2008

report reply to Ray Pearce

It is now costing me over £30.00 per week for fuel just to go to work, take this from my weekly pay and it leaves very little left over to pay increasing gas electric water comm tax food etc .
Any further increases will mean its more benificial for me to stay at home and go on the dole and let the dhss keep me.

Dennis Webb March 12, 2008

report reply to Dennis Webb

I have to do a 22 mile round trip to buy my own food from a supermarket that offers me production cost or less for my produce

John Lovell March 11, 2008

report reply to John Lovell

I don't beleive that this government have control over crude oil prices but yet again the government is hitting evry aspect of life with the continuing hike in tax revenue on fuel.
This has to be the actions of a desperate chancellor/Gordon Brown. He has maximised taxation over a long period and we have little tangible benefits.
I am a recently retired person (Early to look after and ailing wife) and I am on a fixed income and the resultant knock on increases on the basics of life will have a notablt negative effect.
There is an ever growing understanding that this government cares little about the effect on individuals and there is also little that we as individuals can do to change anything. Little wonder there is apathy with regard to politics. A bit of a rant, but I do not believe that I am alone

Labour Conned March 11, 2008

report reply to Labour Conned

CHRISS D, sorry mate that comment of mine No3354 was in response ALASTAIR NELSON' comment No3352 :)

Labour Conned March 11, 2008

report reply to Labour Conned

CHRISS D.

Hi chriss, reducing fuel tax and vat by half as you suggest is all well and good,
but that would mean we couldn't help the Yanks invade other countries wouldn't it? and we cant have that, the poor Yanks would then have to pay more for their fuel and (shock horror) maybe have to drive arround in puny little green cars, just like the rest of the world.

The £4.5million windfall tax Hur Hur Broon is well on course to reap through the high cost of oil, will more than pay for our contribution to the war in Iraq, tell that to our brave fighting forces coming home wounded or in body bags.

So who are we going to help the Yanks invade next eh?

Come on, bring it on.

Seeya

Brian

David Tannock March 10, 2008

report reply to David Tannock

Yes I feel fuel prices seem to be increasing every day, I don't see my salary rising at the same rate and don't forget this effects us in other ways because as fuel goes up so does everday shopping due to the increased shipping and transport costs, a few emails I have recieved state that if we boycott the two big fuel companies ie BP and Shell, they will feel the effects where we are in the pocket and potentially reduce prices. well y never know

Alastair Nelson March 10, 2008

report reply to Alastair Nelson

It's time that people got rid of this nonsense about Greenhouse gases, CO2 is heavier than air and soluble in water so it's a minimal cause of Greenhouse gas, the biggest contributer is Water Vapour, but you can't persuade people to pay vast amounts of money on the guise that its saving the planet if Water gets the blame it deserves. That's not to say that we shouldn't try and cut down pollution caused by cars and factories. To help the country and decrease inflation, petrol duty should be immediately cut in half, and VAT reduced to 5%.

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