But I don't believe it would.
Petrol prices at the pump have gone up because the US attack on Iran has led to less crude oil coming on to the world market. This has increased wholesale prices.
The Liberal Democrat fuel duty cut would do nothing about situation in the Gulf, so no more oil wuold be available for refining.
What it would do is give motorists a bit more cash to spend. And in the absence of any increase in the supply of petrol, that cash would bid up prices at the pump more or less by the amount of the duty cut.
You should add ceteris paribus after any statement about the economy, if only to make yourself sound learned, but I can't see any flaws in this argument.
I feel a certain nostalgia for the years the days when the Lib Dem front bench included Vince Cable, David Laws, Chris Huhne and Steve Webb. We need to have something more substantial to say about the economy than this.
Doesn't it depend on the elasticity of demand for fuel in the UK is relative to the rest of the world? Maybe other parts of the worlds are less willing/able to pay the new equilibrium price and the demand reduction has largely occurred elsewhere. In the UK we may have just reduced spending on other things to satisfy our demand for fuel at the new price. If that's the case a reduction in price at the uk pumps won't increase demand and bid-up prices as it never reduced in the first place.
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