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Speculators blamed for increase in petrol prices

In a rather bizarre development in the UK petrol market, the UK government has today stepped forward to blame speculators for the ongoing increase in the medium term price of oil, even though it has fallen from $100 to around $80 over the last few weeks. While appearing to totally ignore the fact that the vast majority of the price of a litre of fuel in the UK is made up of tax, the UK government has blamed speculators for pushing the price of oil higher over recent months.

Some people may not be aware that the taxation system implemented by the UK government specifically for the oil industry states that as the price of petrol rises the actual tax payable to the UK government will also rise. Rather than fixing the tax at a fixed level per litre in pence, it is actually calculated on a sliding scale which takes into account a percentage of the price of petrol, thereby ensuring that the UK government benefits when the price goes higher.

The UK government could, in a second, reduce the price of petrol significantly for UK motorist by reducing the tax intake but with UK government finances in a complete mess there is more chance of the tax rising than falling in the foreseeable future.

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