A fuel tax (also known as a petrol, gasoline or gas tax, or as a fuel duty) is an
excise tax imposed on the sale of
fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation. Fuels used to power agricultural vehicles, and/or home
heating oil which is similar to
diesel are taxed at a different, usually lower rate. The fuel tax receipts are often dedicated or
hypothecated
Hypothec (; german: Hypothek, french: hypothèque, pl, hipoteka, from Latin, Lat. ''hypotheca'', from Ancient Greek language, Gk. : hypothēkē), sometimes tacit hypothec, is a term used in civil law systems (e.g. law of entire Continental Europ ...
to transportation projects so that the fuel tax is considered by many a
user fee A user fee is a fee, tax, or impost payment paid to a facility owner or operator by a facility user as a necessary condition for using the facility.
People pay user fees for the use of many public services and facilities. At the federal level in ...
. In other countries, the fuel tax is a source of general revenue. Sometimes, the fuel tax is used as an
ecotax
An environmental tax, ecotax (short for ecological taxation), or green tax is a tax levied on activities which are considered to be harmful to the environment and is intended to promote environmentally friendly activities via economic incentives. ...
, to promote ecological sustainability. Fuel taxes are often considered by government agencies such as the
Internal Revenue Service as
regressive tax
A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high ...
es.
Role in energy policy
Taxes on
transportation
Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, ...
fuels have been advocated as a way to reduce pollution and the possibility of
global warming
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
and conserve energy. Placing higher taxes on fossil fuels makes petrol just as expensive as other fuels such as natural gas,
biodiesel
Biodiesel is a form of diesel fuel derived from plants or animals and consisting of long-chain fatty acid esters. It is typically made by chemically reacting lipids such as animal fat ( tallow), soybean oil, or some other vegetable oil ...
or electric batteries, at a cost to the consumer in the form of inflation as transportation costs rise to transport goods all over the country.
Proponents advocate that automobiles should pay for the roads they use and argue that the user tax should not be applied to mass transit projects.
The
Intergovernmental Panel on Climate Change, the
International Energy Agency, the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
, and the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
have called on governments to increase gasoline tax rates in order to combat the social and environmental costs of gasoline consumption.
Tax rates
International pump prices for diesel and gasoline are tracked by several websites, including
Bloomberg L.P.
Bloomberg L.P. is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City. It was co-founded by Michael Bloomberg in 1981, with Thomas Secunda, Duncan MacMillan, Charles Zegar, and a 1 ...
Price differences mostly reflect differences in tax policy.
A Nature study has shown that while gasoline taxes have increased in more countries than they have decreased in during the period 2003–2015, the global mean gasoline tax has decreased due to greater consumption in the low tax countries.
Asia
China
Chinese gasoline taxes have increased the most among the top twenty -emitting countries over the period 2003–2015.
In
China, fuel tax has been a very contentious issue. Efforts by the
State Council to institute a fuel tax in order to finance the
National Trunk Highway System
The expressway network of China, with the national-level expressway system officially known as the National Trunk Highway System (; abbreviated as NTHS), is an integrated system of national and provincial-level Controlled-access highway, expres ...
have run into strong opposition from the
National People's Congress
The National People's Congress of the People's Republic of China (NPC; ), or simply the National People's Congress, is constitutionally the supreme state authority and the national legislature of the People's Republic of China.
With 2,9 ...
, largely out of concern for its impact on farmers. This has been one of the uncommon instances in which the legislature has asserted its authority.
Hong Kong
The following is a list of fuel tax rates for different fuels in Hong Kong:
*
Aviation fuel: HK$6.51
*Light diesel oil: HK$2.89
*Leaded petrol: HK$6.82
*Unleaded petrol: HK$6.06
*Ultra low sulphur diesel: HK$2.89
*
Euro V diesel: HK$0
Singapore
The following is a list of fuel tax rates for different fuels in Singapore:
*98 Octane and above petrol: S$0.79 per litre
*92 to 95 Octane petrol: S$0.66 per litre
India
In
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
, the pricing of fuel varies by state, though central taxes still are part of the pump price of fuel. The Central and state government's taxes make up nearly half of petrol's pump price. The Central govt has different taxes, which amount to about 10–20% of the final cost. The states taxes vary, but on average end up making about 17–20% of the final cost. As a result, approximately 50% - 60% of the pump cost goes to the government in the form of different taxes.
For example, in
Delhi
Delhi, officially the National Capital Territory (NCT) of Delhi, is a city and a union territory of India containing New Delhi, the capital of India. Straddling the Yamuna river, primarily its western or right bank, Delhi shares borders ...
, as of February 18, 2021, price of petrol is per litre. Out of this go to Central
Govt of India
The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, ...
in the form of excise and customs tax. is collected by
state government in the form of sales tax and entry tax. Thus, a total of is collected due to various taxes (which accounts for around 58% of the total price).
Israel
In
Israel
Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
, tax on fuel is 1.35 USD per liter which includes direct fuel tax and VAT. This totals to 78% of total pump price.
Europe
Kerosene tax
The kerosene tax (German: ''Kerosinsteuer'', French: ''taxe kérosène''; Dutch: ''kerosinetaks'') is an ecotax on the kerosene-based jet fuel in commercial aviation, which can be levied within and by the European Union. The legal basis for ...
can be levied throughout the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
on domestic flights and between Member States according to the 2003
Energy Taxation Directive
The Energy Taxation Directive or ETD (2003/96/EC) is a European directive, which establishes the framework conditions of the European Union for the taxation of electricity, motor and aviation fuels and most heating fuels. The directive is part o ...
.
France
As of 2017, the excise tax on gasoline was €0.651 per liter (regional prices varied from €0.407 to €0.6682). With a VAT rate of 20%, the percent of the total price of gasoline that came from taxes was 63.9% The excise tax on diesel fuel was €0.531 per liter (€0.5307 to €0.5631). With the 20% VAT, 59.3% of the total cost of diesel fuel was taxes.
Petroleum products destined for utilisation by aircraft engaged in commercial flights outside of the customs territory of continental France are exempt from all customs duties and domestic taxes. Recently, a rise of 23% in the diesel fuel tax has caused
serious protests in major cities of France, leaving disruption and damage behind them. Before the protests, the French government expected to increase both the petrol and diesel taxes until they both reached €0.78 per liter in 2022.
Germany
Fuel taxes in Germany are €0.4704 per litre for ultra-low sulphur Diesel and €0.6545 per litre for conventional unleaded petrol, plus Value Added Tax (19%) on the fuel itself and the Fuel Tax. That adds up to prices of for ultra-low sulphur Diesel and for unleaded petrol (December 2019).
Netherlands
The sale of fuels in the
Netherlands
)
, anthem = ( en, "William of Nassau")
, image_map =
, map_caption =
, subdivision_type = Sovereign state
, subdivision_name = Kingdom of the Netherlands
, established_title = Before independence
, established_date = Spanish Netherl ...
is levied with an
excise tax. As of 2015, petrol excise tax is EUR0.766 per litre and diesel excise tax is EUR0.482 per litre, while LPG excise tax is EUR0.185 per litre. The 2007 fuel tax was . On top of that is 21% VAT over the entire fuel price, making the Dutch taxes one of the highest in the world. In total, taxes account for 68.84% of the total price of petrol and 56.55% of the total price of diesel. A 1995 excise was raised by
Dutch gulden
The guilder ( nl, gulden, ) or florin was the currency of the Netherlands from the 15th century until 2002, when it was replaced by the euro.
The Dutch name ''gulden'' was a Middle Dutch adjective meaning "golden", and reflects the fact that, wh ...
25 cents (€0.11), the ''Kok Quarter'' (€0.08 raise per litre
gasoline
Gasoline (; ) or petrol (; ) (see ) is a transparent, petroleum-derived flammable liquid that is used primarily as a fuel in most spark-ignited internal combustion engines (also known as petrol engines). It consists mostly of organi ...
and €0.03 raise per litre
diesel), by then Prime-Minister
Wim Kok
Willem "Wim" Kok (; 29 September 1938 – 20 October 2018) was a Dutch politician and trade union leader who served as Prime Minister of the Netherlands from 22 August 1994 until 22 July 2002.[second Balkenende cabinet
The second Balkenende cabinet was the executive branch of the Government of the Netherlands from 27 May 2003 until 7 July 2006. The cabinet was formed by the Christian-democratic Christian Democratic Appeal (CDA), the conservative-liberal Peo ...]
for use in road creation and road and public transport maintenance.
Norway
Motor fuel is taxed with both a ''road use tax'' and a ''CO
2-tax''. The road use tax on petrol is
NOK 4.62 per litre and the CO
2-tax on petrol is NOK 0.88 per litre. The road use tax on auto diesel is NOK 3.62 per litre mineral oil and NOK 1.81 per litre bio diesel. The CO
2-tax on mineral oil is NOK 0.59 per litre.
Poland
In
Poland
Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populou ...
half of the end-user price charged at a petrol station goes towards 3 distinct taxes:
* akcyza (meaning
excise
file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
)
* opłata paliwowa (meaning fuel tax)
* Value-added tax "
VAT" at 23% (from summary of akcyza and opłata paliwowa, and the price of petrol)
Excise and fuel tax are prescribed by
European Commission law, and therefore cannot be lower in any
EU nation. However it is even higher than this EU minimum in Poland, a policy pursued by the former
Minister of finance
A finance minister is an executive or cabinet position in charge of one or more of government finances, economic policy and financial regulation.
A finance minister's portfolio has a large variety of names around the world, such as "treasury", " ...
.
Russia
Tax on mineral resource extraction (2008–2009):
*Oil: varies 1000 RUR/t – 13800 RUR/t; middle MRET 3000 RUR/t (0.058 €/l = 0.284 $/gal).
*Natural gas: 147 RUR/1000m³ (4 €/1000m³).
*Petroleum gas: no
Excise tax on motor fuel 2008–2009:
*RON >80: 3629 RUR/t. (0.071 €/l = 0.343 $/US gal)
*RON <=80: 2657 RUR/t. (0.052 €/l = 0.251 $/US
Other fuel (like avia gasoline, jet fuel, heavy oils, natural gas and
autogas
Autogas or LPG is liquefied petroleum gas (LPG) used as a fuel in internal combustion engines in vehicles as well as in stationary applications such as generators. It is a mixture of propane and butane.
Autogas is widely used as a "green" ...
) prices has no excise tax.
Value Added Tax — 18% on fuel and taxes.
Full tax rate is near 55% of motor fuel prices (ministry of industry and energy facts 2006).
Sweden
The fuel tax in Sweden comprises a
carbon tax
A carbon tax is a tax levied on the carbon emissions required to produce goods and services. Carbon taxes are intended to make visible the "hidden" social costs of carbon emissions, which are otherwise felt only in indirect ways like more sev ...
and an
energy tax An energy tax is a tax that increases the price of energy (Fisher ''et al''., 1996, p. 416). Arguments in favour of energy taxes have included the pursuit of macroeconomic objectives, e.g., fiscal deficit reduction in the 1990s, as well as env ...
. The total tax (including
value added tax) is, from July 1, 2018, per liter petrol and per liter diesel.
United Kingdom
From 23 March 2011 the UK duty rate for the road fuels unleaded petrol, diesel, biodiesel and bioethanol is .
Value Added Tax at 20% is also charged on the price of the fuel and on the duty. An additional
vehicle excise duty Vehicle Excise Duty (VED; also known as "vehicle tax", "car tax", and more controversially as " road tax", and formerly as a "tax disc") is an annual tax that is levied as an excise duty and which must be paid for most types of powered vehicles whi ...
, depending on a vehicle's theoretical production per kilometre, which is applied regardless of the amount of fuel actually consumed, is also levied.
Diesel for use by farmers and construction vehicles is coloured red (Red Diesel) and has a much reduced tax, currently .
[
Jet fuel used for international aviation attracts no duty, and no VAT.
]
North America
Canada
Fuel taxes in Canada can vary greatly between locales. On average, about one-third of the total price of gas at the pump is tax. Excise taxes on gasoline
Gasoline (; ) or petrol (; ) (see ) is a transparent, petroleum-derived flammable liquid that is used primarily as a fuel in most spark-ignited internal combustion engines (also known as petrol engines). It consists mostly of organi ...
and diesel are collected both federal and provincial governments, as well as by some select municipalities (Montreal
Montreal ( ; officially Montréal, ) is the second-most populous city in Canada and most populous city in the Canadian province of Quebec. Founded in 1642 as '' Ville-Marie'', or "City of Mary", it is named after Mount Royal, the triple ...
, Vancouver
Vancouver ( ) is a major city in western Canada, located in the Lower Mainland region of British Columbia. As the List of cities in British Columbia, most populous city in the province, the 2021 Canadian census recorded 662,248 people in the ...
, and Victoria
Victoria most commonly refers to:
* Victoria (Australia), a state of the Commonwealth of Australia
* Victoria, British Columbia, provincial capital of British Columbia, Canada
* Victoria (mythology), Roman goddess of Victory
* Victoria, Seychelle ...
); with combined excise taxes varying from 16.2 ¢/L (73.6 ¢/imperial gal)) in the Yukon
Yukon (; ; formerly called Yukon Territory and also referred to as the Yukon) is the smallest and westernmost of Canada's three territories. It also is the second-least populated province or territory in Canada, with a population of 43,964 as ...
to 30.5 ¢/L ($1.386/imperial gal) in Vancouver
Vancouver ( ) is a major city in western Canada, located in the Lower Mainland region of British Columbia. As the List of cities in British Columbia, most populous city in the province, the 2021 Canadian census recorded 662,248 people in the ...
. As well, the federal government and some provincial governments (Newfoundland and Labrador
Newfoundland and Labrador (; french: Terre-Neuve-et-Labrador; frequently abbreviated as NL) is the easternmost provinces and territories of Canada, province of Canada, in the country's Atlantic Canada, Atlantic region. The province comprises t ...
, Nova Scotia
Nova Scotia ( ; ; ) is one of the thirteen provinces and territories of Canada. It is one of the three Maritime provinces and one of the four Atlantic provinces. Nova Scotia is Latin for "New Scotland".
Most of the population are native Eng ...
, and Quebec
Quebec ( ; )According to the Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is one of the thirtee ...
) collect sales tax ( GST and PST) on top of the retail price ''and'' the excise taxes.
United States
The first U.S. state to enact a gas tax was Oregon
Oregon () is a state in the Pacific Northwest region of the Western United States. The Columbia River delineates much of Oregon's northern boundary with Washington, while the Snake River delineates much of its eastern boundary with Idaho. T ...
in 1919. The states of Colorado
Colorado (, other variants) is a state in the Mountain states, Mountain West subregion of the Western United States. It encompasses most of the Southern Rocky Mountains, as well as the northeastern portion of the Colorado Plateau and the wes ...
, North Dakota
North Dakota () is a U.S. state in the Upper Midwest, named after the indigenous Dakota Sioux. North Dakota is bordered by the Canadian provinces of Saskatchewan and Manitoba to the north and by the U.S. states of Minnesota to the east, So ...
, and New Mexico
)
, population_demonym = New Mexican ( es, Neomexicano, Neomejicano, Nuevo Mexicano)
, seat = Santa Fe
, LargestCity = Albuquerque
, LargestMetro = Tiguex
, OfficialLang = None
, Languages = English, Spanish ( New Mexican), Navajo, Ke ...
followed shortly thereafter. By 1929, all existing 48 states had enacted some sort of gas tax.["Pain at the Pump", Rall, Jamie. State Legislatures magazine; June 2013. National Conference of State Legislatures] Today, fuel taxes in the United States vary by state. The United States federal excise tax on gasoline is and for diesel fuel
Diesel fuel , also called diesel oil, is any liquid fuel specifically designed for use in a diesel engine, a type of internal combustion engine in which fuel ignition takes place without a spark as a result of compression of the inlet air and ...
. On average, as of July 2016, state and local taxes add 29.78 cents to gasoline and 29.81 cents to diesel for a total US average fuel tax of for gas and for diesel.
The state and local tax figures includes fixed-per-gallon taxes as well as variable-rate taxes such as those levied as a percentage of the sales price. For state-level fuel taxes, nineteen states and the District of Columbia levy variable-rate taxes of some kind. The other thirty one states do not tie the per-gallon tax rate to inflation, gas prices, or other factors, and the rate changes only by legislation. As of July 2016, twenty one states had gone ten years or more without an increase in their per-gallon gasoline tax rate.
Because the fuel tax is universally styled as a "road use" tax, exempting off-road farming, marine, etc. use; states impose a tax on commercial operators traveling through their state as if the fuel used was bought there, wherever the fuel is purchased. While most commercial truck drivers have an agent to handle the required paperwork: what's reported is how much tax was collected in each state, how much should have been paid to each state, the net tax for each state and the combined net tax for all states to be paid by or refunded to the operator by their base jurisdiction where they file. The operator carries paperwork proving compliance. The member jurisdictions, the US states and the CA provinces, transmit the return information to each other and settle their net tax balances with each other either by a single transmittal through a clearinghouse set up by the IFTA and operated by Morgan Stanley, or by separate transfers with the other member jurisdictions.[International Fuel Tax Agreement](_blank)
/ref>
Oceania
Australia
The fuel tax system in Australia is very similar to Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
in terms of featuring both a fixed and a variable tax, but varies in the case of exemptions including tax credits
A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "disc ...
and certain excise free fuel.
Since October 2018, the fuel tax in Australia is A$0.412 per litre for petrol and ultra-low sulphur diesel (conventional diesel being taxed at A$0.412 per litre) and the excise for LPG is $0.282 per litre. Since 2000, there is also the GST (goods and services tax) on top of the fuel tax and inflation calculated twice a year called CPI (consumer price index) into the fuel tax since 2015.
New Zealand
Fuel taxes in New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
are considered an excise
file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
applied by the New Zealand Customs Service
The New Zealand Customs Service (Customs, Māori: ''Te Mana Ārai o Aotearoa'') is a state sector organisation in New Zealand whose role is to provide border control and protect the community from potential risks arising from international tra ...
on shipments brought into the country. A breakdown of the fuel taxes is published by th
Ministry of Economic Development
Excise as at 1 August 2012 totals 50.524 cents per litre ( NZ on petrol. In addition the national compulsor
Accident Compensation Corporation
motor vehicle account receives a contribution of . The ethanol component of bio blended petrol currently attracts no excise duty. This was to be reviewed in 2012. Diesel is not taxed at the pump, but road users with vehicles over 3.5 tonne in Gross Laden Weight and any vehicles not powered wholly by any combination of petrol, LPG or CNG must pay th
instead. The Goods and Services Tax (15%) is then applied to the combined total of the value of the commodity and the various taxes. On 25 July 2007 the Minister of Transport Annette King announced that from 1 July 2008 all fuel excise collected would be hypothecated to the National Land Transport Programme.
Africa
South Africa
South Africa imposes a fuel tax, in Dec 2020, per (unleaded 93 octane, inland) liter, composed of the Fuel Levy – R3,37, Road Accident Fund levy – R1,93, associated costs – R3,12, and the Basic Fuel Price – R5,81 for a total of R14.23. (R = South African Rand (ZAR) ~ R15 per US$ in Dec 2020)
See also
* Carbon fee and dividend
A carbon fee and dividend or climate income is a system to reduce greenhouse gas emissions and address climate change. The system imposes a carbon tax on the sale of fossil fuels, and then distributes the revenue of this tax over the entire popu ...
* Carbon tax
A carbon tax is a tax levied on the carbon emissions required to produce goods and services. Carbon taxes are intended to make visible the "hidden" social costs of carbon emissions, which are otherwise felt only in indirect ways like more sev ...
* Fuel taxes and rising oil prices – how the taxes of various countries could be used to mitigate the rise in oil prices since 2003
* Excise tax
* Vehicle miles traveled tax
* International Fuel Tax Agreement
The International Fuel Tax Agreement (or IFTA) is an agreement between the lower 48 states of the United States and the Canadian provinces, to simplify the reporting of fuel use by motor carriers that operate in more than one jurisdiction. Alaska ...
References
External links
International Fuel Prices 2009
with diesel and gasoline prices of 172 countries and information on fuel taxation for state financing
2012 NACS Retail Fuels Report
Actual taxes on Unleaded and diesel Fuels in Europe
Fuel Price in Gurgoan India
{{Authority control
Environmental tax
Petroleum products
Energy economics
Transport economics
Vehicle taxes