The taxation of diesel
On 24 July 2002 the European Commission presented new proposals on the taxation of diesel, linked to that on unleaded petrol (COM (2002) 410). This has two aims:
* to harmonise, gradually, Member States' excise duty on fuel used in international commercial haulage;
* to align the minimum excise rates on diesel used non - commercially - i.e. mostly in cars - with the rates on unleaded petrol.
In order to meet these twin aims, the proposal would create two levels of taxation on diesel:
* a harmonised rate for international commercial use: by 2010, the minimum rate of excise duty on commercially-used diesel would be raised from the current €245 per 1 000 litres to a higher common "central" rate; this would initially be set at €350 in 2003 and would be adjusted for inflation on the basis of the consumer price index from 2003 onwards;
* the minimum rate applied to unleaded petrol on the rest.
The principal justification for the proposals on commercially-used diesel is to end the distortion of competition in the internal market for road haulage. Widely-differing rates of tax (see Table below), the Commission argues, give hauliers based in low-tax countries, but operating across national borders, an unfair competitive advantage. Linked to the distortion of competition is the issue of revenue loss by higher-taxed countries. The proposal is also justified by two further considerations: protection of the environment ; and fuel efficiency . It is argued that trucks make unnecessary detours on commercial journeys in order to refuel in low-tax countries, so increasing journey-lengths and fuel consumption.
National excise duties on fuel, August 2002 (€ per 1 000 litres)
....... Unleaded Petrol.. Diesel*
B.......... 494.......... 290
DK......... 539.......... 405
D.......... 624.......... 455
EL......... 296.......... 245
E.......... 396.......... 294
F.......... 586.......... 370
IE......... 401.......... 354
I.......... 542.......... 403
L.......... 372.......... 253
NL......... 608.......... 340
A.......... 407.......... 282
P.......... 479.......... 272
FIN........ 567.......... 329
S.......... 475.......... 345
UK......... 790.......... 742†
*Diesel fuel with a sulphur content of less than 50 ppm.
† Rate on ultra-low sulphur. Normal rate €839.
Council reached an outline agreement in early February 2003 under which a minimum rate of €302 per 1000 litres would apply from the date the Directive came into effect, rising to €330 in 2010. However, countries needing to make tax increases would have up to seven years to reach the €302 rate, and until 2012 to reach the €330 rate.
(learn to spell,lass) I cant see the drivers turning their anger against their bosses today or tomorow, who afterall are the ones who will lay them off if the fuel prices bite their profits either directly or through taking the competitive edge off british hulage companies. 
