Today I was reading that haulage companies in the UK are planning on staging protests to encourage the chancellor to reduce the UK’s high levy on fuel. Whilst as a consumer I understand only too well the pain that current fuel prices cause, I believe that in the long run our high tax levy is something that will actually protect the UK economy.

Allow me to explain that remark, I subscribe to the theory of ‘peak oil’ the concept that whilst we may have 50% of world oil stocks left – production ability from here on in will only decrease which in turn will make the world oil price rise even more rapidly. Because the UK and its businesses are already used to paying very high fuel prices at some stage, the government will be forced to reduce its fuel taxes – in the face of rising oil prices.

The net result for the UK will be stable oil prices – whereas countries which have very low fuel duty,  will experience huge increases in fuel prices – a disastrous situation for most economies. I do not think that now is the right time to start reducing the duty however – only when things start getting really dire perhaps in another 5-6 years.