Cutting fuel taxes is a bad idea

Governments should support household incomes instead


  • by
  • 03 26, 2022
  • in Leaders

GOVERNMENTS THAT are trying to shield voters from soaring energy and fuel costs are coalescing around a simple idea: help people buy petrol. This week Rishi Sunak, Britain’s chancellor, cut fuel duty by 5p ($0.07) per litre, a 9% reduction, for a year—the most ever in cash terms. From April 1st France will rebate 15 cents ($0.16) per litre of fuel for four months. Many other European countries including Italy and Sweden have also announced cuts. Last year Japan introduced a fuel subsidy of ¥5 ($0.04) a litre, which was recently raised to ¥25. In America two states have suspended their petrol taxes and a bill has been introduced in Congress to do the same to the federal levy.These tax cuts are a mistake. They will waste money and make it harder to wean the rich world off fossil fuels. There are better ways to help people cope with rising energy prices.

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