Italian carbon tax to be re-introduced

Ronchi moves to raise road fuel prices after world oil production increase eases inflation fears

Italy's so-called carbon tax will be re-applied in June to "gradually" counteract expected growth in petrol consumption following the recent decision of the Organisation of Petroleum Exporting Countries (OPEC) to increase crude oil production, according to the country's environment minister.

Italy's first environmental tax on fuel was introduced in January 1999 (ENDS Daily 19 January 1999), but was suspended last November due to fears that, on top of last year's surge in world oil prices, the ecotax would impose unacceptable inflationary pressures (ENDS Daily 3 November 1999).

Carbon tax rates for 2000 have yet to be fixed, but are likely to range up to euros 0.007 (ITL14) for leaded petrol and euros 0.02 for unleaded petrol, potentially somewhat higher than the rates in force for 11 months in 1999. The differential between leaded and unleaded is designed to close a current gap in favour of unleaded by the time that leaded fuel is outlawed in Italy in 2002.

Hauliers are furious at the carbon tax and are demanding to be fully reimbursed for it. Mr Ronchi said he opposes this. "To go beyond the system of partial compensation which already exists would encourage more transport of goods by road. It is well known that this form of goods transportation has the greatest environmental impact," the minister said.

Follow Up:
Italian environment ministry, tel +39 06 57 22 55 80.

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