With petrol prices rising, there is a strong pressure on the government to cut taxes.
However, cutting taxes would leave government finances with an even bigger black hole. If they did cut petrol taxes they would have to increase taxes elsewhere.
- When people campaign for tax cuts, you rarely hear them say. “Cut Petrol Tax, Increase VAT”. “Cut petrol Tax, increase income tax”
Also there are many long term benefits of higher petrol prices.
- Less congestion
- Greater incentives to increase fuel efficiency and find alternatives to crude oil.
- Less Pollution.
- Less Obesity, because people might actually walk / cycle the 500 metres to the shops.
As a motorist, I don’t like paying £50 for a tank of petrol. But, at the same time, I don’t think the Government should cut tax on petrol. I hope they continue to increase tax on petrol. Other countries, especially America should definitely seek to increase tax on petrol.