It's called misdirection...

According to the Brown Broadcasting Corporation Gordon Brown

"Gordon Brown has urged oil industry leaders to come up with ideas for improving supplies as fuel costs soar."

Sounds impressive although the next sentence does dampen expectations somewhat:

"The government has announced moves to increase North Sea oil production, but Energy Minister Malcolm Wicks said they would have no impact on fuel prices. "

The truth of the matter is that as oil prices increase, so it will become economic for the oil exploration companies to develop new oil fields. If the eco-nuts in the US were not so strident in their opposition to any new drilling in Alaska then the US could probably be the largest exporter of oil in the world within 10 years. There is enough oil waiting to be pumped out of known but undeveloped oil fields and in areas where oil is very likely to be found to keep the world running happily for many many years; unfortunately this does not fit the "narrative" of the eco-warriors of the green movement and the Man Made Climate Change believers. Oil is running out and anyway oil is bad is the "narrative" and there is practically nothing that can be done to move the "narrative" on.

The main point to be made on petrol pump prices is that the rise in the price of crude oil makes very little difference to the pump price. According to PetrolPrices.com when petrol was £1.15 a litre this was split thus:

Petrol - 37.35p
Delivery and retailer margin - 10.17p
Duty 50.35p
VAT 17.13p

So that's nearly 59% to the government coffers in tax and duty. So as the price of oil increases the government gains more in revenue.

There is a wrinkle to this that is not often explored, whilst it is true that 59% of the retail price is tax and duty, that does not mean that the government is charging 59%. In fact to get from a price without tax to the price with tax requires an increase of just over 242%. So the tax rate is actually 142%, not bad business for the dynamic duo of Gordon Brown and his little puppet friend Alistair Darling.

Of course the truth is slightly at variance to my figures as the duty is a set figure regardless of the raw material cost. Regardless of this the government must have had a windfall income of many hundreds of millions of pounds since oil prices started to rise, (can anyone work out how much?), surely a reduction in fuel duty is only fair... Sorry just realised that fairness is not in Gordon Browns lexicon.

Of course the Treasury benefit from the oil industry in other ways, as well as the standard taxes on business, Corporation Tax, Income Tax and National Insurance there is a special tax on oil production in the North Sea. This tax used to be 10% but a few years ago (when still Chancellor of the Exchequer) Gordon Brown doubled this supplementary corporation tax to 20%. The result of this doubling of a tax rate; increasing production by developing new oil fields suddenly became less cost-effective. I don't suppose that Gordon Brown will be open to discussing this aspect of the oil industry and I am damn sure that the BBC will not mention it.