Energy prices continue to rise, which is one of the consequences of the war in Ukraine. And if we take fuel for example, its price includes several variables that we will detail in the following lines.
When a liter of fuel costs 2 euros or so, what does its price consist of? What do we pay and why?
First, there is a fixed tax per litre: this is the excise duty. Per liter of fuel you pay a fixed amount of 60 cents per litre. It is the most important tax on fuel.
Then you have the cost of distributing petrol, that is to say the costs linked to its storage in Belgium, its transport to the pump and the costs linked to the operation of this pump. It is also a fixed cost negotiated between the Belgian State and the Petroleum Federation, via a program contract.
And then, finally, there is the cost of production, in other words the extraction, transport and refining. This cost is set by the stock market quotations of petroleum products for the ARA zone (Amsterdam, Rotterdam, Antwerp). It is this cost that has risen sharply. Today it represents 42% of the price of gasoline. Or if we round up to €2 per litre, you pay 84 € cents for the liter to arrive in Belgium.
A few cents are still missing to reach 2 euros
VAT must also be taken into account. As everyone knows, it is 21% and it logically relates to production, to distribution. It’s logic. But also on excise duties, ie a taxation of a tax… Which is legal but undoubtedly intellectually questionable. This is no exception since this principle also applies to the sale of alcohol.
Finally, excise duties and VAT represent just over 50% of the price of a liter of fuel. An amount reinjected into the state budget, in particular for social security.
We talk about it more and more because of the rise in fuel prices, but in practice, what do these “excise duties” correspond to?
We have taxes described as “direct”, these are the taxes payable by name on the income of a citizen or a company and the “indirect” taxes which are collected on the occasion of an act or a fact punctual. These include registration fees, inheritance tax and VAT, Value Added Tax and excise duties.
These excise duties apply to the consumption or use of certain products, whether they are manufactured within the country, whether they come from a Member State of the European Union or whether they are imported from a third country. to the European Union.
And what products are subject to excise duty?
Three families of products are subject to it: energy products, including electricity, alcohol and alcoholic beverages and manufactured tobacco.
And does all this count in the state budget? Yes, since with around 9 billion in revenue, excise duties, in comparison, represent almost a third of VAT revenue.