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ENERGY : EP COMMITTEE CALLS FOR EQUAL DIESEL AND PETROL TAX MINIMUMS.

The European Parliament's Economics Committee have adopted a report calling for the current EU-wide minimum rate of tax on diesel to be increased up to the minimum rate for unleaded petrol. The report, by Olle Schmidt (ALDE, Sweden), was adopted with 37 votes in favour, one against and one abstention. The report was on proposed European Commission amendments to Directive 2003/96/EC concerning the special tax arrangements for gas oil (diesel) and unleaded petrol. The Commission is trying to smooth tax distortions that have led to so-called fuel tourism', with drivers making extra journeys or taking longer routes merely to tank in a country with low taxes.

In this consultative report, the EP committee also proposes raising minimum taxes on diesel more slowly than the Commission. They should, according to the MEPs, go up from a current level of 302 per 1,000 litres for diesel to the petrol level of 359/1,000 litres by 2015, rather than 2012. A special derogation, until 2016, should also be given to Latvia, Lithuania, Poland, Bulgaria and Romania. The European Parliament has of course no competence in taxation and, following a vote during the March plenary in Strasbourg, the Council can only act after reaching unanimity.

Other suggestions by the committee include not increasing, as proposed by the Commission, both diesel and petrol minimum rates to 380 per 1,000 litres in 2014. There should also be no further increases until 2015 in those countries with tax rates over 400 per 1,000 litres for diesel and 500 per 1,000 litres for unleaded petrol. According to rapporteur Schmidt, the Commission's proposal does not give member states the flexibility to promote, by reducing tax rates, the use of non-petroleum based propellants in the most energy-efficient engines.

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Publication:Europe Environment
Date:Feb 7, 2008
Words:295
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