Chancellor George Osborne has insisted that the oil company windfall tax will not be passed onto consumers because those companies paying it have no experience in price collusion or blaming price increases on everything except ‘profit maximisation’.
After introducing a freeze on fuel duty in the budget which will stay in force right up until the point that oil companies aren’t making enough profit, the Chancellor outlined reasons why it will definitely work in the real world.
Osborne told reporters, “You’re all being very cynical if you think that oil companies will immediately look to pass this cost onto the consumer.”
“Anyone with even a passing knowledge of how a competitive market works knows that the first one to raise its price will suffer a drop in sales.”
“What you have to remember is that oil companies are incredibly price competitive, you only have to look at the nations petrol forecourts to realise how often they try to undercut each other.”
“Total and Murco withdrawing from the UK market will only increase this competition, obviously.”
“Anyone passing this price on will be instantly mocked by the two or three companies they compete with, leaving them to clean-up – oh, that’s not the best phrase to describe an oil company’s behaviour.”
Oil Company windfall tax
Chief Secretary to Treasure Danny Alexander was also keen to outline all of the definitely plausible sounding reasons why taxing oil companies more heavily will have no effect whatsoever on the price of petrol at the pumps.
He told reporters, “Just because a multi-billion dollar multinational employs a huge team of expensive experts that work in a big room with ‘tax avoidance’ on the door doesn’t automatically mean they’ll be trying to find a way round this new legislation.”
“I imagine that right now they’re sat in a board room somewhere saying, ‘you know what, I think we have to put our hands up and say the government got us with this one – let’s just pay the tax and get on with our day’.”