Vol. 525 No. 1
19 Mr. J. O'Keeffe asked the Minister for Finance if a reduction in the level of Government duty and taxes on oil and fuel would contribute to a reduction in the level of inflation; and if he will give examples of possibilities in this regard, together with Exchequer costings. [23433/00]
If passed on to the consumer, reductions in excise duties and taxes on oil products would reduce the growth rate of the headline Consumer Price Index below what it would otherwise have been.
The main oil products in the Consumer Price Index include home heating fuel – which makes up 0.85 % of the index – and motor fuel – 4.18 % of the index.
By way of illustration, the following table indicates the impact on the CPI of changes in excise duty on particular petroleum products and the associated cost to the Exchequer. All data relates to a reduction in the excise duty on one litre of fuel and are inclusive of VAT. This assumes that all reductions are passed on to the consumer.
Table 1: CPI Impact of changes in excise duty rates on petroleum products
Motor Fuels
Unleaded Petrol
Auto Diesel
|
Decrease |
Cost (in full year) |
CPI Effect |
Decrease |
Cost (in full year) |
CPI Effect |
|
3p |
£58.9 m |
-0.167% |
3p |
£52.6m |
-0.033% |
|
5p |
£98.8m |
-0.279% |
5p |
£88.1m |
-0.055% |
|
7p |
£139.2m |
-0.390% |
7p |
£124.1m |
-0.077% |
|
Decrease |
Cost (in full year) |
CPI Effect |
Decrease |
Cost (in full year) |
CPI Effect |
|
1p |
£15.7m |
-0.007% |
1p |
£7.5m |
-0.007% |
|
1.5p |
£24.2m |
-0.011% |
1.5p |
£11.5m |
-0.010% |
|
2p |
£33.3m |
-0.015% |
2p |
£15.8m |
-0.013% |
