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Sun 21 Feb 2010 19:13

EU reviewing fuel taxes - PR {P}

No panic yet, it talks of medium term changes, but the EU are reviewing taxation on passenger fuel........

LONDON (Reuters) -- The European Commission is reviewing the taxation structure of transport fuels in a move that could boost demand for gasoline at the expense of diesel, an EU official said on Wednesday.

The current taxation structure favors diesel over gasoline and this has prompted the auto industry to produce more diesel-powered cars.

Refiners in Europe are investing in upgrading capacity to maximize their diesel output to meet the rising demand for diesel.

On the other hand, a fall in gasoline use in the region and import demand from the United States have resulted in oversupply of the fuel, keeping overall plant utilization rates of European refiners low over the past year.

"The Commission is currently looking at taxation of gasoline and diesel," Marcus Lippold, directorate of energy and transport of the European Union, told a conference. "You could put a cap on dieselisation."

But he said that any decision on taxation would take 15 years to take effect because of the sluggish process of vehicle replacement.

"It would at best be a mid-term change," he said.

In the next few years, demand for liquefied petroleum gas (LPG) as a vehicle fuel could grow, because of its green credentials, he said.

Some European governments, including Germany, subsidise LPG prices at the pump and this has boosted consumption.

"LPG might be a good bridging fuel to get to decarbonisation in transport," he said.

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Sun 21 Feb 2010 20:18

EU reviewing fuel taxes - Altea Ego

As the EU taxation structure for fuel has no legal basis in the UK then HM gov will tax as they wish.

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Sun 21 Feb 2010 20:56

EU reviewing fuel taxes - PR {P}

True to a point, but then the Euro standard for engine emissions is taken into account (tax wise). And lets face it, are the government likely to ignore an EU law that enables them to take more tax, or embrace it! :(

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Sun 21 Feb 2010 21:45

EU reviewing fuel taxes - Altea Ego

True to a point, but then the Euro standard for engine emissions is taken into account (tax wise). And lets face it, are the government likely to ignore an EU law that enables them to take more tax, or embrace it! :(

If that means the HM gov will put taxes up, the answer is yes!

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Sun 21 Feb 2010 20:58

EU reviewing fuel taxes - Sofa Spud

Doesn't the refining process yield more-or-less fixed ratios of petrol and diesel?

Thus, originally diesel oil was a cheap by-product of petrol production but now, with all commercial vehicles and getting on for 50% of cars being diesel powered, it's petrol that's effectively the by-product.

Edited by rtj70 on 21/02/2010 at 21:13

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Sun 21 Feb 2010 21:14

EU reviewing fuel taxes - rtj70

I think the other factor is the refineries were not all setup to crack oil to produce so much diesel. And it will take time for them to adjust.

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Sun 21 Feb 2010 21:50

EU reviewing fuel taxes - PR {P}

Although all crude oil is different, a barrel on average contains more petrol than diesel. Refineries are fractional distillation, once cracking and reforming comes in to play then costs increase substantially.

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