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EC proposes minimum excise duties on commercial diesel

From autoindustry| March 15,2007

A European Commission proposal to harmonise diesel fuel prices aims to stop existing tax differentials on diesel used by trucks ("commercial gas oil") creating distortions of competition within the EU Internal Market in the haulage sector and leading to "fuel tourism”.

"I am firmly convinced that European haulage markets, now fully opened to competition can no longer afford the excessive differentials in excise duties applied to gas oil used by trucks by the Member States. These create significant distortions of competition among companies competing on the same markets and threatens jobs." said László Kovács, the Commissioner responsible for Taxation and Customs Union. "At the same time, it is important that any proposal concerning road transport contributes to reducing its greenhouse gas emissions, since this sector alone represents 19.3% of the CO2 emissions in EU-25."

The EC says excise duties on fuel represent up to 18% of the running costs of a road haulage business, and that in a liberalised market where competition is stiff, differences in operating costs resulting from national taxes have a large impact. Heavy trucks currently cover between 1,500 and 3,000 km on a single tank.

The Commission proposes to narrow the tax differentials existing on diesel used by the haulage sector by offering more flexibility to Member States to differentiate between commercial and non-commercial gas oil rates. All Member States will now be able to lower the taxation of commercial diesel below their respective national level of taxation on 1 January 2003, provided the minima are respected and provided the fiscal burden on haulage remains the same, through the introduction of road charges.

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