§ Mr. Skeetasked the Secretary of State for Energy (1), of the price paid for petroleum products in the United Kingdom prior to the Budget, what percentage per barrel was paid to the United Kingdom and host Governments, respectively; and what change has been made in these figures following the recent increase of VAT from 8 to 25 per cent.;
(2) what is the ratio of company profits to Government taxes—host and United Kingdom—in the realised price of a barrel of oil.
§ Mr. John SmithIt is not possible to give exact figures because of variations between costs of different crude oils. About half the realised price in the United Kingdom of a barrel of oil goes to the producer Government and about one-quarter to the British Government. The oil company profits are relatively small—about 2 or 3 per cent. of the realised price.
The recent increase in VAT will make relatively little difference to these figures because it applies only to motor spirits and will not in general affect the cost of such spirits when used for industrial purposes since the normal VAT deduction procedure will apply.