The government planned to increase excise duties on petrol and diesel as of January 1, 2024. But now the House of Representatives seems to be putting a stop to that. What difference would it make to your wallet if the excise tax increase continues or not? We calculated it for you.
Let's take a look at the background of the excise duty issue. After Russia invaded Ukraine in February 2022, fuel prices exploded. To accommodate motorists and businesses a little, the Dutch government reduced the excise duty on petrol and diesel as of April 1, 2022. It was indicated that it was a temporary measure that would be gradually abolished.
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And indeed, As of July 1, 2023, the excise duty will increase again. As a result, petrol became 14 cents per liter more expensive and the liter price of diesel rose by 10 cents. The second step to reverse the excise duty reduction on petrol and diesel would follow on January 1, 2024. Because there will immediately be a significant inflation indexation, it would lead to drastic increases in fuel prices. After the excise duty increase on January 1, petrol will become 21 cents per liter more expensive and diesel 13.5 cents.
That sounds a lot, especially when you know that an average car uses 45 to 50 liters of fuel. For a petrol car you will spend more than ten euros extra for a full tank. For a diesel car that is just under 7 euros. But how much does or not an excise tax increase save you in the long term? We do the math.
The average Dutch person drives 11,000 kilometers per year. Let's assume that this Jan Automodaal drives a petrol car that consumes an average of 1 liter per 14 kilometers (7.1 l/100 km). This means that he fills up to 786 liters of petrol every year. If you look for a cheap gas station, you now pay about 2.10 euros per liter.
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With that price you now pay 1650 euros per year in gasoline, or about 138 euros per month. If the price per liter rises to 2.31 euros, these amounts will increase to 1816 and 151 euros respectively. With the increase in excise duty, you will therefore spend approximately 166 euros extra on petrol every year, or almost 14 euros per month. If you drive the same car 15,000 kilometers per year, it will cost you 225 euros more per year and 18.75 euros per month.
Anyone who has a diesel car usually travels more kilometers per year than their petrol neighbor. Let's assume 22,000 kilometers per year and an average consumption of about 1 in 18 (5.6 l/100 km).
With the current diesel price of approximately 1.90 euros (not on the highway!), this diesel engine costs 2322 euros per year. The diesel bill per month is approximately 194 euros. If the diesel price rises by 13.5 cents per liter, that will be 2,487 euros. This saves 165 euros annually and 13.75 euros per month. Remarkably, the diesel driver would be just as badly off with an increase in excise duty as Jan Automodaal who fills up with petrol.
So it will make a difference if the excise duty increase does not go ahead, but not as much as we thought. On the other hand, the demand for oil is currently greater than ever. That drives up prices. And the fact that a number of oil-producing countries have reduced production does not help. All this ultimately leads to higher prices at the pump, even if the excise duty increase does not go ahead. In short, don't count yourself rich too quickly.
This post was last modified on September 19, 2023 11:11 am
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