Government does not move in fuel tax – publico

 
         

                 

                         
                     

                 

 
 

There is disturbed in fuel tax. The government announced on Friday that it has decided to maintain the value of the tax on oil products (ISP), which had dropped a cent in May.

“The decision is justified by the fact that the taxation of gasoline is already much higher than diesel and also the evolution of the share price in recent days, “said a statement from the Ministry of Finance. This is the second quarterly tax review, an assessment with which the Government has undertaken, in order to adapt the tax burden to fuel price variations.

The ISP has increased by six cents in February to make up for a breakdown of tax revenues from VAT caused by the decline in fuel prices. Three months later, the first review, a rise in fuel prices caused the ISP went down to five cents.

The increase in February was met with protest by both the fuel sector, as the transport. The hauliers were able to even negotiate with the government a tax discount on some posts on the border with Spain, where the fuel is cheaper.

According to data from the General for Energy and Geology Directorate, the average price simple diesel (the cheapest) at the pump was on Thursday 1,099 euros per liter. Simple gasoline cost 1.35 euros.

How does the calculation

In a statement released this afternoon, the Ministry of Finance recalls the mechanism it uses to revisions of the tax. Essentially, for a lowering of the tax, it is necessary that the fuel prices go up (which means that the state collects more revenue through VAT). If prices go down, the tax should rise. In the formula of the Government, for each variation of 4.5 cents in fuel prices, the tax should go up or down a cent.

“In January, the month before the initial update, the reference prices gasoline and diesel fuel calculated by National Entity for the Fuel Market amounted respectively to 1,118 euros and 0,861 euros, “recalls Finance. These reference prices are used for the calculations of the Government exclude taxes and some costs, and are lower than sales prices to the public.

“In April, three months in relation to that prior period, and excluding the effects of Decree No. 24-A / 2016 of 11 February [which increased the tax], there was an increase in those prices at 0.0465 euros in gasoline and 0.0385 euros in diesel, “the statement continues. It was this change of about 4.7 cents in gasoline that determined the decline of certain taxes in May. And the descent turned out to be also applied to gas oil, although the reference price in this case has only risen 3.9 cents.

The ministry states that when comparing the July figures with January, the reference prices rose four cents in gasoline and 7.9 cents on diesel fuel. In the case of gasoline, and following the first revision logic, rising by less than 4.5 cents, would lead to the cancellation of the May decline. “Following the methodology already applied previously, the Government should revoke the reduction of one cent on petrol and maintain ISP reduction only in diesel having now chosen to keep unchanged tax for both fuels,” states Finance.