Do High Oil Prices Justify an Increase in Taxation in a Mature Oil Province? The Case of the UK Continental Shelf
In response to the structural shift in oil price coupled with greater import dependency, concerns about security of supply have once again emerged as a major policy issue. The UK, the largest producer of oil and natural gas in the European Union, became a net importer of natural gas in 2004, and, according to Government estimates, will become a net importer of oil by the end of the decade. A weakened North Sea performance means extra reliance, both for the UK and Europe as a whole, on global oil and gas network and imports. In 2002, the UK Government introduced a 10 per cent supplementary charge and in 2005, doubled the charge to 20 per cent in an attempt to capture more revenues from the oil industry because of the increase in the price of crude oil. However, higher tax rates do not necessarily generate higher fiscal revenue and in the long term may result in materially lower revenues if investment is discouraged. It is therefore argued that the increase in the fiscal take came at the wrong time for the UK Continental Shelf and that the UK Government’s concern should have been to encourage more oil production from its declining province, especially in the light of the rising concern surrounding the security of supply.
|Date of creation:||Feb 2007|
|Publication status:||Published in Energy Policy 35(8), pp. 4305-4318. (Revised Version)|
|Contact details of provider:|| Postal: Guildford, Surrey GU2 5XH, UK|
Phone: +44(0)1483 686956
Fax: +44(0)1483 689548
Web page: http://www.seec.surrey.ac.uk
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- T. R. Stauffer & John C. Gault, 1985. "Exploration Risks and Mineral Taxation: How Fiscal Regimes Affect Exploration Incentives," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
- Paul G. Bradley, 1998. "On the Use of Modern Asset Pricing for Comparing Alternative Royalty Systems for Petroleum Development Projects," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 47-81.
- Rutledge, Ian & Wright, Philip, 1998. "Profitability and taxation in the UKCS oil and gas industry: analysing the distribution of rewards between company and country," Energy Policy, Elsevier, vol. 26(10), pages 795-812, August.
- Zhang, Lei, 1995. "Taxing Economic Rents in Oil Production : An Assessment of UK PRT," The Warwick Economics Research Paper Series (TWERPS) 445, University of Warwick, Department of Economics.
- Dieter Helm, 2005. "The Assessment: The New Energy Paradigm," Oxford Review of Economic Policy, Oxford University Press, vol. 21(1), pages 1-18, Spring.
When requesting a correction, please mention this item's handle: RePEc:sur:seedps:116. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lester C Hunt)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.