Government freezes fuel taxes in 2006

17 August 2005

AMSTERDAM — The Dutch government has agreed to forgo its annual increase in fuel taxes next year, and possibly in 2007.

This is an acknowledgement of the plight of Dutch motorists who have seen the country’s world-beating prices for petrol and diesel spiral to new heights in recent months.

Freezing the duty and tax on car fuel will cost the Dutch government an estimated EUR 100 million.

The duty is normally adjusted annually to take account of inflation. The price of a litre of Euro 95 petrol could, for example, rise by 2 cents.

The price crude oil, which determines the price of petrol, has risen by more than 50 percent since the start of the year, news agency ANP reported. A barrel of American crude oil costs about USD 66 compared with a price of USD 42 in January.

The recommended price for a litre of Euro unleaded petrol has risen from EUR 1.185 to 1.439.

The car sector organisations RAI and Bovag have welcomed the “good signal by the Cabinet”. A spokesperson said it was a clear acknowledgement that petrol prices are too high.

But RAI and Bovag said the government had to do more to bring about a structural decrease of fuel taxes. Both organisations made a direct plea last month to The Hague to reduce the financial burden on motorists.

Government ministers are holding a series of meeting in coming days to put together a package of tax reductions measures — worth EUR 1 billion — to combat the anticipated drop in the public’s spending power next year.

Subject: Dutch news