Brian Cowen (Laois-Offaly, Fianna Fail)

The tax content on energy products may be made up of two elements, the excise content and the VAT content. Excise does not apply to all energy products although it applies to motor fuels and home heating oils. However, the rate of excise is fixed relative to the volume of fuel sold and therefore there is no increase in yield as the price increases. VAT is fixed as a percentage of price and, assuming consumption levels are maintained, increases in energy prices will result in additional VAT receipts from the energy sector.

It should be borne in mind that to the extent that spending in the economy is reallocated to motor fuels and away from other VAT-liable spending and to the extent that the overall level of economic activity is reduced by higher oil prices, there may be little or no net gain to the Exchequer as a result of any additional revenue that may accrue from motor fuels.

Given those qualifications, I am informed by the Revenue Commissioners that the estimated additional revenue generated for petrol and diesel for each of the first eight months of 2005 ranged from zero to €5.4 million as the prices increased. This figure relates to petrol and diesel only because monthly data are not available for other energy products.

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