[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/oec/ctpaaa/21-en.html
   My bibliography  Save this paper

The Diesel Differential: Differences in the Tax Treatment of Gasoline and Diesel for Road Use

Author

Listed:
  • Michelle Harding

    (OECD)

Abstract
Diesel and gasoline account for around 95% of energy used for road transport in the OECD and for the largest share of revenue from taxes on energy. In 33 out of 34 OECD countries, diesel fuel is taxed at lower rates than gasoline both in terms of energy and carbon content. To assess whether this difference is warranted from an environmental perspective, this paper examines the rationales for taxing both fuels, considering the externalities (including local air pollution, carbon emissions and other social costs related to road transport) associated with the use of each fuel and the fuel efficiency advantage of diesel vehicles. The revenue, distributional and competitiveness consequences of increasing tax rates on diesel are also briefly considered and the revenue effects of the tax treatment of diesel are shown to be significant. We conclude that the externalities associated with each fuel show that the lower tax rates that currently apply to diesel fuel are not justifiable from an environmental perspective. Reduction of the diesel differential is warranted. A gradual approach to removing the differential would allow the adverse distributional and competitiveness impacts to be mitigated during the transitional phase. Avantage fiscal en faveur du gazole : différences de traitement fiscal de l'essence et du gazole à usage routier Le gazole et l’essence représentent environ 95 % de l’énergie consommée pour le transport routier dans la zone OCDE et génèrent l’essentiel des recettes issues des taxes sur l’énergie. Dans 33 des 34 pays de l’OCDE, le gazole est taxé à des taux inférieurs à ceux applicables à l’essence, tant du point de vue du contenu énergétique que de la teneur en carbone. Afin de déterminer si cette différence est justifiée d’un point de vue environnemental, ce document examine les raisons qui sous-tendent l’imposition de ces deux types de carburants, tenant compte des externalités (pollution atmosphérique locale, émissions de carbone et autres coûts sociaux induits par le transport routier, etc.) associées à l’utilisation de chacun de ces carburants et la moindre consommation des véhicules diesel. Les conséquences sur le plan des recettes, de la distribution et de la compétitivité d’un relèvement des taux d’imposition du gazole font également l’objet d’une analyse succincte et les répercussions de la taxation du gazole sur les recettes fiscale s’avèrent significatives. En conclusion, les externalités associées à chacun de ces carburants ne justifient pas, d’un point de vue environnemental, les taux d’imposition plus faibles actuellement réservés au gazole. Une réduction de l’avantage fiscal en faveur du gazole est justifiée. Une réduction progressive de cet avantage permettrait l'atténuation dans la phase transitoire des effets défavorables sur la distribution et la compétitivité.

Suggested Citation

  • Michelle Harding, 2014. "The Diesel Differential: Differences in the Tax Treatment of Gasoline and Diesel for Road Use," OECD Taxation Working Papers 21, OECD Publishing.
    • Handle: RePEc:oec:ctpaaa:21-en
    DOI: 10.1787/5jz14cd7hk6b-en
    as

    Download full text from publisher

    File URL: https://doi.org/10.1787/5jz14cd7hk6b-en
    Download Restriction: no
    File URL: https://libkey.io/10.1787/5jz14cd7hk6b-en?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Böhm, Jens & Peterson, Sonja, 2021. "Fossil fuel subsidy inventories vs. net carbon prices: A consistent approach for measuring fossil fuel price incentives," Kiel Working Papers 2186, Kiel Institute for the World Economy (IfW Kiel).
    2. Yi-Xuan Gao & Hua Liao & Paul J. Burke & Yi-Ming Wei, 2015. "Road transport energy consumption in the G7 and BRICS: 1973-2010," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 38(4/5/6), pages 342-356.
    3. Barros, Victor & Cruz, Carlos Oliveira & Júdice, Tomás & Sarmento, Joaquim Miranda, 2021. "Is taxation being effectively used to promote public transport in Europe?," Transport Policy, Elsevier, vol. 114(C), pages 215-224.
    4. Walid Oueslati & Vera Zipperer & Damien Rousselière & Alexandros Dimitropoulos, 2017. "Energy taxes, reforms and income inequality: An empirical cross-country analysis," International Economics, CEPII research center, issue 150, pages 80-95.
    5. Christophe André & Hyunjeong Hwang, 2018. "Tax reform to support growth and employment in Finland," OECD Economics Department Working Papers 1468, OECD Publishing.
    6. Tomás, Manuel & García-Muros, Xaquín & Alonso-Epelde, Eva & Arto, Iñaki & Rodríguez-Zúñiga, Alejandro & Monge, Cristina & González-Eguino, Mikel, 2023. "Ensuring a just energy transition: A distributional analysis of diesel tax reform in Spain with stakeholder engagement," Energy Policy, Elsevier, vol. 177(C).
    7. Zimmer, Anne & Koch, Nicolas, 2017. "Fuel consumption dynamics in Europe: Tax reform implications for air pollution and carbon emissions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 22-50.
    8. Sylvain Benoît & Yannick Lucotte & Sébastien Ringuedé, 2019. "Competition and price stickiness: Evidence from the French retail gasoline market," Working Papers hal-02292332, HAL.
    9. Eakins, John, 2016. "An application of the double hurdle model to petrol and diesel household expenditures in Ireland," Transport Policy, Elsevier, vol. 47(C), pages 84-93.
    10. Agustin Redonda, 2016. "Tax Expenditures and Sustainability. An Overview," Discussion Notes 1603, Council on Economic Policies.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:ctpaaa:21-en. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ctoecfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.