Revealed: The countries paying the most and least tax on petrol
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Petrol prices have been skyrocketing all over the globe, and there are many reasons for the price spikes, including crude oil price increases and international wars.
But there's another factor that contributes to high petrol prices, and it's tax.
Some countries charge so much tax, that almost half of the price you pay at the pump goes straight to the government.
In the UK, fuel is taxed twice, attracting fuel duty, and then having 20 percent VAT (value added tax, in NZ we call it GST) added on top.
On the other hand, some countries don't charge much tax on petrol at all.
A few years ago, the U.S. Department of Energy’s Alternative Fuels Data Center released a study of how much petrol and diesel are taxed around the world. While the graph is a couple of years old, and there surely will have been some changes, it gives us a good idea of what different countries charge for fuel tax.
The DoE’s graph shows that countries such as Indonesia, Brazil, the United States, Canada, Mexico, and China pay the least amount of tax on their fuel. Whereas countries such as the UK, the Netherlands, Turkey, and Italy pay the most.
New Zealand is somewhat in the middle of the graph, but below average. But we know that this information is old, and while many countries' taxation may not have wavered, New Zealand has had quite a few changes in recent years.
The Auckland Council's regional fuel levy of 11.5 cents a litre took effect in 2018, one year before this graph was completed. In February this year (2022), MTA energy and environment sector manager, Ian Baggott, stated that 52 per cent of the cost of fuel was made up of taxes, including the fuel excise duty, the emission trading scheme levy and GST.
More recently, however, the government decreased fuel excise duties and road user charges by 25c a litre. The duty currently paid on fuel is about 55 cents a litre. Then there is 35 cents in GST, and about 15 for the Emissions Trading Scheme. This adds up to around $1.05 per litre, which is certainly less than half of what you're paying at the pump.
So, while Kiwis are certainly feeling a bit of pain at the pump at the moment, it looks as though there are lots of countries that are worse off in terms of fuel taxes.