Tuesday 1 February 2011

Some bad news - some good news

As many of you will know, myself and the Memsahib are keen bikers. We have just purchased a lightweight bike for taking with us on the boat. So we are hoping that the current fuel prices will not take a big bite out of our nest egg.

First The BAD News

UK Fuel prices are set to hit an all-time high in the near future, the AA has warned. With hundreds of garages across the UK charging more than 127p per litre for unleaded petrol, the Association says we should expect the average fuel price in Britain to exceed the record of 119.7p, set in July 2008.

Earlier this week, a poll conducted by the AA revealed 67 per cent of its 17,500 members are making dramatic changes to their lifestyle to cope with the soaring cost of petrol. Wonder how many will make the switch to two wheels?

Now the GOOD News

Oxforshire based company Cella Energy is developing a fuel that could be used instead of petrol and would cost just 19 pence per litre. The fuel uses hydrogen and is described by Cella energy as 'the perfect fuel' as it produces three times as much energy than its equivalent weight of petrol and when it burns its by-product is water. At 19p pence per litre it would cost just £3.23 to fill a typical 17 litre motorcycle tank, however the government would typically tax it so that its price at the pump would be around 60 pence per litre.

At the moment, at £1.28 for a litre of petrol, 48 pence is the petrol, 59p is fuel duty and 21 pence is VAT.

Stephen Voller, Chief Executive of Cella Energy said: "Early indications are that the micro-beads can be used in existing vehicles without engine modification. The materials are hydrogen-based, and so when used produce no carbon emissions at the point of use, in a similar way to electric vehicles." Currently the product is still in testing and is expected to be available in three to five years.

Last of all the Caveat.

Is it a greener fuel source and it creates significantly less greenhouse gases than petrol in it's production. If so then it's going to be difficult to justify introducing a duty on it level with the current fuel tax, which is based on a policy of reducing carbon emissions. The government will of course have to collect the revenue shortfall elsewhere by creating a different crisis to tax.

£18 Billion of VAT and duty per year on fuel and counting...




Later....

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