When one fifth is too much...

Happy New Year... right that's that. I won't be mentioning it again now. It's all done with. Other than to say I trust you all enjoyed yours with merriment and all that that implies.

Now it's back to reality with a serious bump. Be warned, I've dug an old orange box out of the back of the garage, and I'm about to turn it upside down and hop on top for a bit of a rant....

Over the last 12 months fuel costs in the UK have gone up by around 15 pence per litre. On January the 1st we had a fuel duty increase of 0.76 pence and todays VAT rise means a further 3 pence per litre. This brings the average price for a litre of fuel to around £1.26 (approximately £70 for a full tank). What's worrying is that we don't seem to care and I suspect this has a lot to do with the lack of understanding by Joe & Joanna Public as to how this figure is arrived at.

The cost of petrol (& Diesel, there's not much difference anymore), the actual product, is more like 40p per litre, so whats the other 85p ? The retailer makes around 5p per litre and the remaining 80p Is straight in the governments pocket. That's just over 20p in VAT and around 60p in duty.
The duty alone is more than the actual product!!!??!

In 1995 the government had 39.4p out of the 54p per litre (73%). By 2000 this had risen to 58.6p of the 76.2p (77%).

Now I'm reading rumors of further price increases being hidden under the cover of the VAT increase by unscrupulous traders who just seem intent on making a miserable situation even worse by being greedy b@5****s.

The BBC reported this gem today:
The VAT rise may spur a broader increase in the price of goods, according to a survey of 200 senior managers by accountancy group KPMG. 

It has claimed that many retailers are planning to use the tax rise to "mask" more extensive price increases. 

It said 60% of retailers and consumer product manufacturers planned to increase their prices over and above the VAT rise.

As a nation, consumerism via retail fuels our economy. Without it nothing will work quite properly. Or at least that is what we are taught to believe and I'm quite sure that on many levels it's true. However, our all new shiny hybrid government seem hell bent on some pretty major social experimentation in the name of saving money. As a result, we're going to have a phenomenal year or total meltdown. I'm not sure I can call it either way just yet.

I reckon the best advice I can suggest would be to keep your eyes peeled and count your pennies. The high street have been backed into a corner and it looks like they're going to turn nasty.

It could be a fight to the death and as consumers, we'll only take so much before it all just becomes too much.

This post originally appeared here: Posterous