Oil Prices:
We all know that the price of crude oil is linked to the amount we pay per litre but it is interesting to hear what the Government is expecting to happen. The Budget states that ‘demand for oil will remain dependent on the shape and pace of the global recovery,’ which of course would influence the price. The Government’s forecasts are based on the oil price remaining around $75 – $81 per barrel. The cost at the time of writing this post is $81.24 per barrel. This is in line with what oil brokers in Switzerland are predicting.
Fuel Duty:
The cost at the pumps is not going up the expected 3p in April, instead the Government is going to stagger the increase. The price per litre will rise by 1p on the 1st April, a further 1p rise on the 1st October 2010 and by 0.76p on the 1st January 2011. Whether or not you have a car this will affect the price you pay for home heating because the cost for oil suppliers to deliver your oil will increase. Given the small margins they work on they will undoubtedly pass the additional cost onto the customer.
Bio Fuels:
As announced back in the 2008 budget the 20p per litre bio fuels duty differential will cease from 1st April 2010 and from then on will be charged the main duty rate. However, it is states in the Pre-Budget Report 2009 that the duty differential will continue for biodiesel produced from used cooking oil for an additional two years.
Boiler Scrappage Scheme:
We all know about the well publicised boiler Scrappage scheme which offers a £400 payment to help householders upgrade from the least efficient boiler (G – Rated ) to more efficient up to date models. Since its launch the Government states there have already been 118,000 successful applications helping home users reduce carbon emissions and save money on their bills.
Carbon Emissions:
The Government is backing householders who need support to install insulation and energy generation systems that have considerable higher upfront costs. This is in order to help the UK meet its 2020 objectives for reducing carbon emissions. The Government’s Household Energy Management Strategy, which they published at the start of this month, proposes a type of Pay as You Save arrangement. Essentially millions of households will be able to finance the cost of installation through the savings they make each month.
At WOS we would really like the 2011 Budget to look at reducing the 5% VAT added to heating oil sales. However, seeing as the EU legislation allows VAT of up to 25% and it was the Tories who originally increased VAT on domestic energy usage from 0% to 5% , we are not holding our collective breath !
