OK. Say you and Chuck Merkin

both buy one barrel of oil and month.

You both pay $100 + the tax. Which, say, for you is $100 a barrel, and for him is £0.

The crude price goes up to $200 a barrel.

For you, that's an increase of 50% in the post-tax price (from $200 to $300).

For him that's an increase of 100% (from $100 to $200).

BUT - assuming you both want to carry on consuming a barrel a month, you both have to pay an extra $100 to do so.

In what way are you less affected than him?

(I could take you through where the offset to the post-tax % price is, which explains the apparent contradiction, if you want me to....)

Posted By: Tricky Hawes, Jun 13, 13:40:00