Wednesday, January 04, 2012

12c increase in Diesel Fuel taxes

With the new year came some changes in regulations and taxes. In the news the most attention has been given to the change in car taxes. The government hiked up the taxes of diesel fuel about 13 cents. This will bring the price at pump close to 95E10, although it will still be a few cents cheaper. A web site following fuel prices at service stations says yesterdays average prices were 1.569€/L for 95E10 and 1.519€/L for diesel. That's in US prices about $7,69/gal and $7,44/gal. Oh, and the 95E10 got 2 or 3 cents more on taxes, but that gets hardly mentioned.

It used to be that those who drive a little were better off with a petrol engine. With diesel you paid the diesel tax (which petrol cars don't have) upfront but the cheaper diesel fuel made if cheaper, if you drove enough. Which one was cheaper, depended on the model and make of the car, but you needed to drive about 15000km or 20000km per year to get even, and more than that to make up the difference in the price of the cars as diesel cars are a bit more expensive.

This new tax hike brings the fuel prices almost even and all previous calculations are useless. It's not all doom and gloom for diesel owners, though. The diesel cars have a 'diesel tax' on them, and this tax was cut by 18%. In effect, the base cost of operating a diesel car goes down, but the cost of fuel goes up. People who drive less will save money, and those who drive a lot will pay more.

The new changes will move the equilibrium a bit, making the diesels more competitive earlier. People might buy a bit more fuel efficient diesel instead of petrol car, even though they aren't driving a lot. On the other hand it makes them less cheap to drive for those who drive a lot and they might cut some excess driving. Energy will get saved on both ends of the scale. Sounds good!

Of course, the government doesn't mind the tax money coming in. :-D

Edit: Taxes on new cars will change in April. A little lower taxes (a few hundred €) on low-emission cars, but the taxes on a big high-emission car might go up a few thousand euros. Some big-ass SUV's might get 10k€ increase in taxes.

No comments:

Post a Comment