FuelsEurope statement on Energy Taxation

FuelsEurope’s views on energy taxation are summarized below. They are intended to contribute to a balanced discussion on the principles that should be considered when deciding how to revise the taxation of energy products. FuelsEurope recognizes that absolute levels of taxation are a matter for Member States: we do not therefore present arguments on the absolute levels that may be set to influence consumption patterns.

However, it must be recognized that overall levels of taxation on industrial consumers can have a significant impact on their international competitiveness. The type and level of taxation of energy products are chosen for many different purposes, such as revenue raising, to influence consumer behavior, support certain sectors of the economy or drive environmental change. They could however have un-anticipated consequences, often not obvious immediately and this is the case with the taxation of diesel and gasoline in many Member States. Favourable tax rates for diesel versus gasoline have been a major factor influencing the demand growth of diesel and decline of gasoline. In 1990 gasoline demand was 30% greater than diesel; in 2010, diesel demand was twice as big as the gasoline demand.