Petrol demand dow

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As any economist worth his salt knows, if you keep putting prices up, there comes a point in the price/demand curve that demand drops so much that total revenues begin to fall, states Harris & Co accountancy services. We all know that fuel prices are at records highs and, thanks to the Government taxes on them, they keep relentlessly rising. Last year fuel prices increased by a whopping 15%, but the volume sold went down 15%, leaving the Government no better off, despite the tax hikes. Interestingly the latest figures show that last month the number of litres of fuel bought by UK motorists was at its lowest level since records began. Are we now at the point in the price/demand curve where further price rises actually generate less overall revenue for the Government and should taxes on fuel actually be reduced?

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