The rupee today should be at least five per cent lower than that base number, to compensate for the higher inflation rate in India, and should not therefore be stronger than about Rs 63/dollar today. More than one study argued last year that the correct exchange level would be about Rs 60 to the US dollar, a level endorsed by the finance minister - who, please remember, is not a fan of a cheap currency policy. The RBI governor said the other day that the rupee would be too strong if it climbed to 55 against the dollar - the level that prevailed before the currency slide began a year ago. That is why the Reserve Bank of India's (RBI's) failure to prevent the rupee from appreciating (by buying up enough dollars) in recent weeks has been disconcerting.
The link between exports and rupee value is too close to ignore, and the conclusion inescapable: a cheaper rupee helped exports, which have fallen off after the rupee gained in strength. Then, as the rupee moved back up the charts to 62/63, export growth tapered off to about five per cent, before dipping in February - the first time since June that exports shrank. After the rupee hit a trough at 68.80 in August, export growth peaked, at 13.5 per cent in October. In July, a couple of months after the rupee began falling, export growth began. He said the Chancellor could use the extra VAT to reduce the duty.There is a telling pattern to the export numbers. Howard Cox of FairFuelUK said: “The last 12 months of eye-watering pump prices, seriously made worse by opportunistic fuel supply chain wholesalers, has given the Exchequer an unforeseen VAT windfall of more than £1billion: the equivalent of 3p of fuel duty.” Last night campaigners urged Mr Sunak to go further and cut the tax. Cars for our constituents aren’t a luxury Chancellor, they are a necessity.” “Any rise in fuel duty puts a barrier in the way of people accessing well-paying jobs and taking care of their families. The Chancellor has been under huge political pressure not to raise fuel duty.ĭozens of MPs from Northern Tory pressure group the NRG wrote to him saying: “Those in the North rely on cars to go to work, to take their children to school, and to put food on the table. It’s a return to cutting back on other consumer spending, perhaps even heating or food, to keep the car that gets them to work on the road.” Its fuel price spokesman Luke Bosdet added: “As for poorer motorists - many of them now facing daily charges to drive in cities - there is no escape.
KEEP IT DOWN DRIVERS
The AA said: “Whether it’s down to oil producers, market speculators, Treasury taxes or struggling retailers trying to balance their margins, record pump prices must be saying to drivers with the means it’s time to make the switch to electric.” This is due to high demand as economies recover from the Covid pandemic - and the Opec-Plus group of oil producing countries not increasing supply.
Some analysts believe the oil price could rise further. They claimed smaller, independent ones were trying to rebuild profits after the steep fall in sales prompted by the first UK lockdown last year.īut they also say the increase was partly due to a doubling of the oil price since last year.īrent Crude, the international benchmark, now stands at more than $86 a barrel. The RAC said retailers have increased their profit margins by 4p a litre, from around 5.5p in April last year to 8.59p. He urged fuel providers to make sure they put drivers before profits, saying: “We would always want to see providers ensure they are providing good value to customers.” Yesterday the PM’s official spokesman also dropped a massive hint of the move, saying: “We recognise rising fuel costs are a challenge for the British public.” The average forecourt price per litre hit 142.94p on Sunday, with soaring oil prices and retailers blamed for putting up prices. In a major victory for The Sun’s “Keep It Down” Campaign, the duty will be frozen for the second time this year.Ĭhancellor Rishi Sunak was forced to abandon the planned hike in tomorrow’s Budget after petrol prices hit a record high. The hated levy was due to go up from 57.95p per litre to 60.79p - potentially costing drivers £66 extra a year per car.īut MPs say they have been privately assured by the Treasury that the scheduled 4.9 per cent rise for 2022 will not go ahead. The average forecourt price per litre hit a record 142.94p on Sunday, with soaring oil prices and retailers blamed for hiking prices
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