That’s right

FRED Gibbon complained that the price of motor fuels is too high and said that the Government has never tried to provide some form of relief for the road user (Mail, November 23).

He is wrong.

About 70 per cent of the price of a gallon of petrol is Government duty and VAT. That’s about 93p on a litre of petrol.

That leaves about 40p for every litre of petrol that the oil companies sell.

But they also have to explore for crude oil in environmentally hostile parts of the world, ship it to their refineries, turn it into natural gas, LPG, diesel oil, petrol, fuel oil for industrial purposes, lubricating oils, and bitumen for road surfacing.

Then all these products have to be distributed by road, rail or ship to where the customers are.

The Government recently discussed costs with the oil companies and found that they were not making unreasonable profits.

So the only way there could be a substantial reduction in the price of petrol and diesel is by the Government reducing the duty or the VAT.

If they did that they would lose billions of pounds of revenue every year.

That would mean reducing Government spending even more than they are at present, with even more job losses and deeper cuts in public services.

The alternative would be to put up either income tax, corporation tax or VAT, or all three, to make up for the revenue they would lose if they reduced the duty and VAT on petrol and diesel.

Fred may think there is a simple way for the Government to reduce petrol and diesel prices.

But there isn’t.

Jim Allan,

Hartlepool.