How much do taxes affect fuel prices in Europe?

While petrol and diesel prices are still higher than in the past, excise duty and VAT continue to weigh on these figures

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By: Riccardo Ciriaco

Published by: Brian Potter

Jan 1, 2024 at 1:00am ET

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One of the worst enemies of European motorists for the last two years or so, fuel prices are now in a phase of decline that is finally giving wallets some breathing space. However, filling up the tank is still too expensive, not only because of the rise in international oil prices, but also because taxes continue to weigh heavily on wallets, particularly in certain countries.

Yes... but what impact does taxation have on petrol and diesel prices in Europe? The answer varies from country to country, but broadly speaking, taxes account for around half of the cost of filling up the tank. Let's take a closer look.

What are fuel prices made up of?

To begin with, let's look at how fuel prices are made up. There are four main components: excise duty, VAT, the industrial price and the gross margin. The first is made up of taxes introduced on certain products to finance certain emergencies, which have since become fixed. The second is the famous "value added tax". The third represents the cost of oil and its refining, and the fourth is distributors' profits. To sum up :

excise duty
VAT
industrial price
gross margin

Taxes are represented by the first two elements.

Homme faisant le plein de sa voiture à une station-service

Excise duty on fuels in Europe

If we now play with the figures published by the European Commission, we see that excise duty on petrol in Europe (including the UK) averages around 55.5 cents per litre (cent/litre). The lowest and highest peaks are in Hungary (33.6 cent/litre) and the Netherlands (82.1 cent/litre). The UK ranks ninth (63.2 cent/litre).

All the other data is shown in the table below, where it can be seen that 13 countries are above the average and 15 below.

Country Excise duty on petrol (€/l) Netherlands 0,821 Italy 0,728 Finland 0,722 Greece 0,713 France 0.691 Ireland 0.656 Germany 0.654 Portugal 0.647 United Kingdom 0.632 Denmark 0.626 Sweden 0.604 Belgium 0.6 Estonia 0.563 EU average + United Kingdom 0.555 Malta 0.549 Slovakia 0.543 Latvia 0.518 Luxembourg 0.516 Croatia 0.512 Czech Republic 0.5 Austria 0.489 Spain 0.472 Lithuania 0.466 Slovenia 0.445 Cyprus 0.439 Romania 0.369 Bulgaria 0.363 Poland 0.357 Hungary 0.336

VAT on fuels in Europe

As far as VAT is concerned, all Member States adopt the same domestic taxation on petrol and diesel (with the exception, once again, of the Czech Republic). The lowest tax is levied in Luxembourg (17%), while the highest is in Hungary (27%). Roughly speaking, VAT in the EU and the UK averages 21.5%: the countries above and below this figure are 11 and 17 respectively. France applies a rate of 20%.

Country VAT on fuel (%) Hungary 27 Croatia 25 Denmark 25 Sweden 25 Finland 24 Greece 24 Ireland 23 Poland 23 Portugal 23 Italy 22 Slovenia 22 EU average + United Kingdom 21.46 Belgium 21 Czech Republic 21 Latvia 21 Lithuania 21 Netherlands 21 Spain 21 Austria 20 Bulgaria 20 Estonia 20 France 20 Slovakia 20 United Kingdom 20 20 Cyprus 19 Germany 19 Romania 19 Malta 18 Luxembourg 17

Fuel prices in Europe

What are the current fuel prices ? According to figures from the European Commission, petrol costs an average of €1.68 per litre (€/l), taking into account the 27 EU Member States, and 1.73 €/l, taking into account only the 19 countries in the euro zone. The country where petrol is most expensive is the Netherlands (€1.9/l), while the cheapest is Romania (€1.33/l). France is in fifth place (and above the two averages), with €1.79/l.

Countries Petrol price (€/l) Netherlands 1.909 Denmark 1.845 Greece 1.828 Finland 1.809 France 1.798 Germany 1.781 Italy 1.78 Ireland 1.733 EU average 1.731 (euro zone) - 1.684 (27) Portugal 1.642 Estonia 1.626 Belgium 1.621 Sweden 1.621 Latvia 1.605 Spain 1.557 Slovakia 1.534 Austria 1.506 Hungary 1.502 Czech Republic 1.501 Croatia 1.49 Poland 1.48 Slovenia 1.471 Luxembourg 1.461 Lithuania 1.456 Cyprus 1.393 Bulgaria 1.358 Malta 1.34 Romania 1.333

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And diesel? The averages for political Europe and the euro zone alone are 1.66 and 1.68 €/litre respectively, with Sweden (1.98 €/litre) and Malta (1.2 €/litre) at the top and bottom of the table. France is in fifth place at €1.74/litre.

N.B.: prices updated to 11 December 2023.

Country of origin Diesel price (€/l) Sweden 1.987 Finland 1.859 Belgium 1.767 Italy 1.753 France 1.747 Netherlands 1.738 Ireland 1.734 Germany 1.706 EU average (euro zone) 1.682 Greece 1.671 Denmark 1.663 EU average (27) 1.658 Austria 1.617 Latvia 1.605 Croatia 1.6 Portugal 1.576 Hungary 1.56 Slovakia 1.539 Estonia 1.532 Cyprus 1.527 Spain 1.526 Slovenia 1.52 Poland 1.516 Czech Republic 1.515 Luxembourg 1.504 Lithuania 1.501 Romania 1.425 Bulgaria 1.369 Malta 1.21

Sources: Commissione europea, Banca d’Italia

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