Vol. 512 No. 6
32 Mr. S. Ryan asked the Minister for Finance the plans, if any, he has to reduce the relative tax payable on LPG in view of the fact that it is more environmentally friendly than other fuels; and if he will make a statement on the matter. [26906/99]
I received representations requesting that the excise duty rates on LPG be reduced and these were considered, as is normal procedure, in the context of the recent budget preparations. Member states must comply with the minimum rates of excise duty, in respect of the various dutiable products, which are laid down in EU directives. As the House is aware, I reduced the VAT inclusive excise duty rate on liquid petroleum gas for automotive use by 1.82p per litre in last year's budget. The current rate for this product is £41.75 per 1,000 litres or just above the permitted EU minimum level of £39.38 per 1,000 litres. Consequently there is little scope for a further reduction in that rate.
As regards the excise duty rate for LPG for certain commercial and industrial uses, the current rate of excise duty is £14.30 per 1,000 litres while the EU minimum rate is £14.17 per 1,000 litres. Again there is little scope for further reduction. The minimum rate of duty laid down in the directive for LPG which is used for heating purposes is zero. The Irish duty rate on this product is £14.30 per 1,000 litres.
EU proposals on the taxation of energy products, which are under discussion would, inter alia, require increases in certain EU minimum rates for LPG. While I have acted to reduce the rates of excise duty on LPG, I must take account of the EU position in regard to our commitments and freedom of action in this area.
I thank the Minister for his response. Does he agree that LPG is a more environmentally friendly fuel and that it is desirable to find some means whereby, for example, the use of LPG in Dublin Bus vehicles could be encouraged? I understand that he received a submission which proposed the use of LPG on an experimental basis by Dublin Bus. If he thinks that there is limited scope for the use of excise duty rates to encourage the use of LPG, what other means are available to him to encourage its use?
I recognise that LPG is an environmentally friendly fuel. The total receipts in respect of LPG for all uses in 1998 was £4.13 million and the 1999 receipts are expected to be in the region of £3.9 million. If the Deputy has any further suggestions in this area, I would be glad to hear them.
