Abolish car tax too
Reading the material suggests that this is really just a foregone conclusion. The origins of this tax come from our commitments under Kyoto to reduce greenhouse gas emissions. If nothing is done we will overshoot our commitment – apparently we produce more greenhouse gases per capita than rest of Europe. (Incidently, peat seems to be a dirtier fuel than oil, which surprised me.)
If we break our Kyoto limits we will be obliged to pay a fine, which could be as much as E240m. p.a. So another aspect of the tax is that the polluter pays principle would dictate that this cost be levied on fuel consumption.
However the tax is primarily aimed at changing behaviour like the plastic bag tax. They estimate that 10% increase in the price of carbon fuel will cause a 5% in greenhouse gas emissions over time. They therefore propose to phase a tax in from the next budget, and increase it over the next two to three years to what is deemed to be the right rate to promote behaviour that meets our Kyoto targets. In practical terms, the costs of fuel will increase by the amounts in the following table:
Fuel Retail Unit Next Budget Ultimately
Peat - Briquette Bale ˆ 0.195 0.520
Coal 40kg Bag ˆ 0.897 2.391
Tonne ˆ 22.4 59.8
Oil – Heating Litre ˆ 0.029 0.077
Oil – Motor Litre ˆ 0.028 0.074
LPG Litre ˆ 0.014 0.038
The only point we might think of is, given this will be in the budget anyway, suggest the simultaneous abolition of car tax and shifting of that burden onto motor fuel as well - meet the Kyoto targets and save on administration at the same time.
Natural Gas kWh ˆ 0.0014 0.0037