in Automotive News Europe, by Bill Lehane | Bloomberg, 07-02-2019
“We expect diesel tax to continue to go up in Europe,” said Mark Williams, an analyst at energy consultancy Wood Mackenzie in London. “The bigger markets are going that way, where diesel tax is increasing at a faster rate than gasoline.”
Across the EU, diesel’s average tax discount compared with gasoline has eroded by about a third since 2015, to 12.5-euro cents a liter, according to Bloomberg calculations from European Commission data. At the pump, gasoline’s average price premium across the EU has shrunk to just 3 cents a liter, the lowest since 2008, separate figures show.
However, public perception has started to turn against diesel, amid rising concerns about the health and environmental effects of fuel emissions. In recent years, some local governments, notably in Germany, have discouraged the use of diesel vehicles to focus on improving air quality.
“Dieselgate and the related urban air quality concerns have totally changed the picture,” said Mathuren. “The demonization of diesel is a reality that in our opinion is totally unjustified” for engines that comply with EU emissions limits, he said.
He noted that while diesel prices have risen within the last year, those for gasoline have declined amid a global glut of the latter fuel.
While the convergence of tax rates on gasoline and diesel is a possibility, consumers are pushing back on higher costs, according to Koen Wessels, an analyst at London-based Energy Aspects. “France is already trying to implement it — though not without resistance.”
In December, France dropped plans to introduce more fossil-fuel taxes after fuel taxes levied last year helped spark widespread protests by the so-called Yellow Vests. The measures were also criticized by industry group UFIP, which said fuel sales fell in France in 2018 as drivers crossed into neighboring countries to fill up their tanks and avoid paying the higher taxes.
Because the price of diesel at the pump is volatile and influenced by swings in the global oil market, a tax increase may not always translate to a higher pump price, according to Wessels.
“Governments are trending towards discouraging the use of diesel, and rising fuel duty will definitely play a part in this, but whether this will lead to a visible effect at the pump remains to be seen,” he said.