Isn’t it time for a rethink on fuel duty?

It was reported this week that cash-strapped drivers are cutting back on using their cars because they cannot afford the sky-high cost of fuel.

According to the website whatgas.com, roughly 60 per cent of the cost of a litre of petrol or diesel goes to the Treasury in taxation.

This, along with the cost of crude oil, has helped to push the price of a litre of unleaded to around £1.30 – and that’s out of most people’s price range.

As a result, 517 million fewer litres of fuel were sold between January and June – and that cost the Treasury £985 million in lost fuel duty.

I’m one of those drivers who has cut back on petrol. I’ve got my bike out and I’m cycling 16 miles a day to and from work.

As a result I’m fitter, healthier, smugger and constantly tired-er.

But my petrol bill last week was exactly zero, and that’s good news for me but bad news for the Chancellor.

So – and beat me to death if I’m being a bit thick here – wouldn’t it make sense to, you know, cut the amount of tax drivers are being asked to pay?

Now, I’m not an economist, but surely if something becomes cheaper people buy more of it?

Therefore, even though the Government would take a bit less in tax per transaction, more fuel would be sold and the Treasury would have more money in the long run.

I know there are environmental concerns, but it’s a balancing act. If the road haulage industry grinds to a halt, or people cannot afford to get to work, that’s not going to help the economy.

Mind you, there are a number of businesses which, you’d think, would be better off if they just charged a little bit less.

Take the cinema. You go there one night with your family and, once you’ve bought tickets, drinks and sweets, you’ll probably have to sell your youngest in the foyer to stave off bankruptcy.

That said, does anybody actually buy sweets inside the cinema these days? Personally, I take my own – you can even get a bag of popcorn in if you take your jacket off and stuff the bag down the sleeve.

Yes, you’re not supposed to, but if it’s a choice between paying 79p for a bag in the supermarket or £3 for a box in the cinema, I know where my money’s going.

However, if they just charged a bit less I’d buy my popcorn or M&Ms in the cinema. They’d then sell more of both and, surely, make more money in the long run?

The trains are the same. Buy a ticket to London and you can be looking at a sizeable investment.

And yet, the last time I travelled to the capital there were dozens and dozens of empty seats.

If they charged less wouldn’t more people travel with them?

At least, that makes total sense to me.

But, then again, I’m not an economist…

By Andrew Owen