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Petroleum industry

France Cuts Fuel Prices, EU Governments Worry About Tax Reductions

Strategic Insights

— 1 min read

The French government is set to cut gasoline pump prices from October 1 under its tax stabilization plan, which lowers prices by 0.20 francs/litre. This move has raised concerns among other EU governments about potential copycat demands for reductions in motor fuel taxes. VAT rates for gasoline vary across the EU, ranging from 12% in Luxembourg to 25% in Denmark and Sweden. The decrease in prices will be achieved by decreasing VAT on gasoline as crude prices rise.

Key Takeaways:

  • The French government will cut gasoline pump prices by 0.20 francs/litre under its tax stabilization plan.
  • The new system will decrease VAT on gasoline as crude prices rise.
  • Other EU governments worry that they may face demands for reductions in motor fuel taxes following France's move.
  • VAT rates for 95 unleaded gasoline range from 12% in Luxembourg to 25% in Denmark and Sweden.
  • BP and RWE are in talks over a joint venture to combine their refining and fuel retail businesses in Germany.
  • The joint venture would make BP the second-largest fuel retailer in Germany, after Veba-owned Aral.

Statistics:

  • 0.20 francs: The reduction in gasoline pump prices per liter under the French tax stabilization plan.
  • 12%: The VAT rate for 95 unleaded gasoline in Luxembourg.
  • 25%: The VAT rate for 95 unleaded gasoline in Denmark and Sweden.
  • 17%: The market share that the joint venture between BP and RWE would command in the German fuel market.
  • 200,000 b/d: The combined refining capacity of RWE's two German refineries.

Sources:

  • "France cuts fuel prices" (an unspecified source, original text).
  • "VAT rates for 95 unleaded gasoline vary across the EU": European Union.
  • "BP and RWE to combine refining and retail businesses in Germany": BP, RWE.
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