Taxes Aren’t Driving Sky-High Fuel Prices, Profiteering Bosses Are

In the last week, dozens of drivers have been arrested for participating in “go-slows” along major UK roads. These fuel price protests are just one instance of a global protest surge against the extraordinary increase in the price of essentials in the past year.

Fuel protest ‘go slow’ on the M4. I’m in a van with protester Richard Dite who is leading a 30mph procession of vehicles as his horn blares the Pirates of the Caribbean theme. We’re approaching the M4 Severn Bridge. pic.twitter.com/tcztcJXTG4

— Conor Gogarty (@ConorGogarty) July 4, 2022

As of last weekend, at least 19 countries have seen significant unrest since the start of the year in response to the cost-of-living crisis. Prices of essentials have skyrocketed across the globe, with wheat prices in Europe up 52% since January and global oil prices up 350% since the start of the pandemic. Argentina, Chile, Cyprus, Greece, Ghana, Ecuador, Indonesia, Iran, Kenya, Lebanon, Palestine, Peru, Sudan, and Tunisia – all have seen price protests in the last few months. In Guinea on 2 June, a protestor was killed as armed police fired at protestors in the capital. In Libya, the House of Representatives in Tobruk was set on fire during demonstrations. But it is in Sri Lanka where the movement has claimed its first government scalp.

Sri Lanka citizens chilling in their president’s residence. 😂😂 pic.twitter.com/lwWDpyXdSG

— Dr. George 💊 (@GeorgeAnagli) July 9, 2022

Demonstrators in Colombo, Sri Lanka stormed the presidential palace, making full use of the facilities. Negotiations between opposition parties over the new government are ongoing, with Sri Lanka’s trade union movement calling a general strike and demanding that a transitional government takes the president’s place.

Sri Lanka is relatively unusual in seeing the organised participation of trade unions in the broader movement. Elsewhere, protestors have been a mix of different social classes, often including farmers and truck drivers, and have pitched themselves against governments from left (Peru and Chile) to right (Ecuador and Kenya).

In Britain, the most dramatic evidence of bubbling unrest so far has been in the sudden spread of strikes, with rail workers, teachers, barristers, brewery workers and lorry drivers all amongst those already in dispute or looking set to strike soon.

They have now been joined by fuel protestors. Though relatively few in number, the fuel protestors are clearly expressing a widely-felt sentiment – they could, quite possibly, spark something like France’s gilets jaunes movement of 2018.

So just to get this straight, motorist are allowed (by the police) to go slow and block motorways in protest about rising fuel costs, whereas climate change protestors that block motorway jcts are demonised and jailed. No wonder we are fucked. #FuelProtest #ClimateCrisis

— Ric (@RickyCarterna) July 4, 2022

Unsurprisingly, there’s an uneasiness about the fuel protests among the British left. The protestors have focused their demands on reducing fuel duty. Howard Cox, who has appeared as their spokesperson, is a freight industry lobbyist and climate change sceptic. Their main representative group, FairFuelUK, was set up in 2011 to push lower fuel taxes and claims the support of 140 MPs, including Tory MP Craig Mackinlay, chair of the climate delaying Net Zero Scrutiny Group.

Furthermore, cuts to fuel duty seem to run counter to much of what the left stands for. We don’t want more gas-guzzling cars and for decades, the environmental movement has argued that “sin taxes” like fuel duty are the best way to discourage polluting. But whatever use this argument may have served in the 90s or 00s, it is now becoming a barrier to systemic change to address the ecological crisis. And standing aside from the social forces that are now starting to move against different elements of that crisis – of which soaring prices for essentials, including soaring oil prices, are very much part – in the hope of something ideologically more suitable appears risks consigning the left to irrelevance.

For many people, not attached to a particular political view, the fact that somebody is doing something about price rises will be appealing. Whether the demands of those taking action, and which come to shape the politics of the crisis are pitched to the right – cut fuel taxes – or the left – control price rises – will depend on whether the left is prepared to engage with the arguments being raised.

In the case of petrol and diesel prices, millions – particularly those outside major cities – have little choice but to use cars every day. Whilst in London, just 27% of people drive to work, across the rest of the UK it is 68%. This isn’t always a real choice. With public transport coverage so poor and tickets so expensive, the car is often the best, even only option. There is a danger for an urban left in missing the real-life experience of workers in Britain.

The problem is, fuel duty cuts are unlikely to make much difference to these workers. In March, then-chancellor Rishi Sunak cut the fuel price duty by 5p on a litre. This cost the government £5bn in lost revenue. But fuel prices had risen so much at the time that it was barely a week’s worth of price increases. The entire cut was wiped out a few weeks later. Worse, there were reports of the duty cut not being passed on at all.

Fuel price rises today aren’t being driven by fuel taxes, so cutting those taxes won’t make much difference to the price drivers pay. What it will do is divert attention away from the real enemy: oil company super-profits. As oil prices have risen globally, BP and Shell have between them made £40bn in profit last year. BP’s chief executive has called his company a “cash machine”.

Bezos says it’s “misdirection” to blame Shell’s exploitation of its market power for higher gas prices, evincing a “deep misunderstanding” of economic fundamentals. Shell is merely raising prices to cover its costs, in which case profits should be constant. pic.twitter.com/FqA7YZViDr

— Hal Singer (@HalSinger) July 7, 2022

There are other ways to organise our transport. Germany introduced a 9 euro month-long travel pass across its entire rail network on 1 June. The results have been dramatic: passenger numbers on the network are up 15% on the June average, whilst early data suggest congestion in urban areas has been reduced by as much as 20%. Of course, this fare cut has been introduced in a train system that has not been mangled by years of cuts and profiteering, with ticket prices already far below those in the UK. And German rail unions are right to point out that this temporary measure will require more funding if the system – including its overworked employees – is going to carry the strain.

But there’s no reason in principle why a big investment in buses, trams and railways couldn’t deliver something similar here. Crossrail in London shows what can be done with public investment, transforming travel in the city. Northern Powerhouse Rail could do the same for the Northern cities – or it would do if Boris “Levelling Up” Johnson hadn’t cancelled the planned investment. What’s lacking is the political will to make the change happen.

To get there, however, would require systemic change: diverting the investment funds away from supporting fossil-fuel-dependent personal transportation systems, and into supporting clean public transport. We might also want to look at ways to reduce working and commuting time right across the economy.

But right now, the left – and the environmental movement more generally – should identify the common enemy in the crisis. The environment we live in is changing rapidly. Rising prices are the result of environmental turmoil, from the immense ecological shock of Covid-19 to the extreme weather damaging harvests across the world. Russia’s invasion of Ukraine is another layer of chaos. But in the midst of it, the product of a century of industrialised, fossil fuel-driven capitalism, it is oil companies making a profit. Both environmentalists and commuters face a common enemy in those profits. Both should want to see them shrunk to zero. Don’t cut fuel duty – cap fuel prices. And tax super-profiteers to pay for public transport.