Joan Burton (Dublin West, Labour)
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Question 211: To ask the Minister for Finance the estimate of the amount of excise duty that would need to be added to a litre of petrol if vehicle registration tax were removed; the equivalent income that would be derived for the Exchequer through additional excise duties on petrol and diesel; and if he will make a statement on the matter. [41075/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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It is assumed that the information sought by the Deputy is the additional excise duty on a litre of petrol that would be required to produce the same yield as Vehicle Registration Tax in the event of that tax being abolished.

On the basis that the VRT yield for 2006 will be approximately €1,300 million, I am advised by the Revenue Commissioners that a yield of this amount from excise duty and additional VAT could be achieved by increasing the excise duty on a litre of unleaded petrol by 85 cent. This method assumes that the normal price elasticity factors will apply and consumption would fall as a result. However, if there were no change in purchasing patterns or consequent reduction in consumption the increase required would be 54 cent per litre.

In the scenario outlined in this reply there is no provision for a price increase in diesel and additional yield does not therefore arise.