Monday, 7 February 2011

Petrol Prices

As Peter Griffin would say: "You know what really grinds my gears?"

I remember the days back in 2006/7 when the UK petrol prices were below 90p per litre.  I also remember the fuel crisis we had sometime back around the millennium where there was a supposed lack of fuel and the prices sky-rocketed and there were mass protests.  Today prices are hitting £1.30 a litre and with declared tax increases by the government will probably rise further by around 5p.  As far as I'm aware this isn't due to demand and supply like the last crisis; this is just because that's what the fuel companies are deciding to charge, and as they all go along with it, we don't have a choice.  This rise in prices, linked with the recession, makes for a trying time.  However, this time around we simply take the blow with only the occasional mumble to our cohorts and get on with filling our cars, while small business everywhere are forced to shut down as they can't afford the petrol prices needed to fuel vital deliveries that are key to their business.

Now I'm at uni, which is over 110 miles away from my home, it makes a pretty expensive round trip.  Especially for a student.  The main reason for this post is that while I try and keep my long distance trips to a minimum to conserve money, there are times and events that require my attendance, or at the very least I don't want to miss. A couple of these events are coming up in this month and will likely drain my already limited funds.  Luckily I have some friends who are also up for the trip to help split the cost, but it still annoys me.

Why not take the train? Well I could do if it fit my schedule better but to be honest the train prices aren't much cheaper.  A little anecdote I find funny helps to highlight this point.  Last year National Rail, (who run the railway services in Britain) while planning their company Christmas party, decided against using the trains to transport their staff to and from the venue, they decided on hiring coaches as the trains were too expensive.

Anyway this was on my mind today as I've been trying to make arrangements to go to rare get together with a large group of friends, and I felt like sharing.  I understand supply and demand, and petrol has a relatively price inelasticity; if we, the public, are willing to pay these prices then why shouldn't they charge them.  However I don't think the government should compound the problem by increasing taxes surrounding petrol, they're just kicking us when we're down.

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