Brendan Howlin (Wexford, Labour)
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Question 121: To ask the Minister for Finance the estimated additional revenue likely to accrue to the Exchequer in terms of excise duties and VAT over and above the estimates at the budget, arising from the increase in the price of petrol and other oil products; and if he will make a statement on the matter. [26629/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The taxation of motor fuel and other oil products is made up of two elements, mineral oil excise and VAT. The amount of mineral oil excise collected is based on the volume of motor fuel sold, in this case the number of litres of petrol, or diesel sold. The revenue collected from mineral oil excise does not fluctuate with price changes. Therefore, assuming there is no change in the volume sold, the increase in tax revenue arising from increases in the cost of motor fuels will correspond to an increase in VAT revenue.

Accordingly, I am advised by the Revenue Commissioners that the estimated additional yield from VAT over and above the budget estimate is as set out below:

It must, however, be borne in mind that to the extent that spending in the economy is re-allocated to motor fuel and other oil products 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.