Petrol prices: the low cost of motoring

I add a couple of references to the previous post on petrol prices, courtesy of the excellent “The Cycling Lawyer”:

    From Creating Growth, Cutting Carbon; Making Sustainable Local Transport Happen. “According to the Retail Price Index, the cost of buying a car fell by 29% in cash terms between 1999 and 2009, while general RPI inflation over the same period was 29%. However, the cost of car maintenance, petrol and oil, and tax and insurance all increased markedly faster than general inflation. The “combined” cost of motoring (covering purchase price and running costs) fell by 11% relevant to the general rate of inflation. Over the same period rail fares rose by 43% and bus and coach fares rose by 58% “.

    From a briefing note prepared by the Institute of Fiscal Studies,

“Why, in theory, should a government be concerned to change consumer behaviour through the use of fuel duty? The argument is that the costs of motoring exceed the private costs faced by an individual motorist. There are environmental costs, noise costs, road-damage costs and congestion costs which people may not factor into their decision about whether and how much to drive. This means that the costs to society of motoring exceed the costs to the individual, which will lead to a level of motoring that is both inefficiently high and inefficiently cheap from a social perspective. The duty is therefore a way of forcing the private motorist to take account of these social costs.”Note: The IFS paper does not include the costs of collisions, danger, health of the non-active traveller to society. It’s good on how small the effect of petrol price rises has been though.