Diesel excise tax falls to restrict price rise

6 July 2005

BRUSSELS — The excise tax on diesel fell for the first time on Wednesday because the maximum price of EUR 1.10 per litre was breached.

When the price of diesel rose above that amount, a new government regulation was to come into effect. The law is aimed at restraining rising fuel costs.

But a difference of opinion developed between Finance Minister Didier Reynders and the Economic Ministry as they both sought to introduce varying prices.

Due to the cut in excise duties, Reynders said the new diesel price would come out as EUR 1.1124 per litre and not EUR 1.1150. However, the federal Economy Ministry intended to implement a price of EUR 1.111 per litre.

Reynders stressed that his price was correct, but it emerged later in the day that the maximum price was in fact EUR 1.111 per litre, newspaper ‘Het Nieuwsblad’ reported.

However, Christian Democrat (CD&V) executive Simonne Creyf wondered aloud whether the government’s regulations were so complicated it no longer knew how to apply them.

When oil prices started to increase sharply last year, the federal government passed legislation on 27 December 2004 aimed at restricting a rise in fuel prices.

If petrol rises above EUR 1.50 per litre or diesel rises above EUR 1.10, the excise taxes are reduced to a figure equal to the marginal return on BTW taxes (VAT in English).

Subject: Belgian news