LONDON Feb 17 The European Commission is
reviewing the taxation structure of transport fuels in a move
that could boost demand for gasoline at the expense of diesel,
an EU official said on Wednesday.
The current taxation structure favours diesel over gasoline
and this has prompted the auto industry to produce more
Refiners in Europe are investing in upgrading capacity to
maximise their diesel output to meet the rising demand for
On the other hand, a fall in gasoline use in the region and
import demand from the United States have resulted in oversupply
of the fuel, keeping overall plant utilisation rates of European
refiners low over the past yeaer.
"The Commission is currently looking at taxation of gasoline
and diesel," Marcus Lippold, directorate of energy and transport
of the European Union, told a conference.
"You could put a cap on dieselisation."
But he said that any decision on taxation would take 15
years to take effect because of the sluggish process of vehicle
"It would at best be a mid-term change," he said.
In the next few years, demand for liquefied petroleum gas
(LPG) as a motor fuel could grow, because of its green
credentials, he said.
Some European governments, including Germany, subsidise LPG
prices at the pump and this has boosted consumption.
"LPG might be a good bridging fuel to get to decarbonisation
in transport," he said.
(Reporting by Emma Farge; Editing by Amanda Cooper)