Support 100 years of independent journalism.

  1. Business
  2. Economics
27 February 2012

Chart of the day: the rise and rise of petrol prices

Rising prices spell trouble for the government.

By George Eaton

Few issues are more politically toxic for a government than rising petrol prices. It was during the fuel protests of 2000 that the then Conservative leader, William Hague, enjoyed his first and last lead in the opinion polls. At that time, the average price of a litre of unleaded petrol stood at 80p; today it stands at more than 136p – a near-record high.

Polling shows that the “cost of petrol” is among voters’ biggest concerns (just behind electricity and gas prices) and as PoliticalBetting’s Mike Smithson has noted before, there is a telling correlation between rising prices and falling support for the governing party.

A

George Osborne has already ruled out further cuts to fuel duty – and rightly so. The argument that any spare cash should be used to reduce tax on motorists rather than, say, limit cuts to Sure Start, is unpersuasive. But with petrol more highly taxed in Britain than in almost any other country, Tory MPs feel the government still has a case to answer. Of the current average pump price of 136.09p a litre, 58.95p is fuel duty and 22.68p is VAT – a de facto tax rate of 149.9 per cent.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s global affairs newsletter, every Monday and Friday. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy