Cutting fuel taxes is a bad idea
Governments should support household incomes instead
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.
This article appeared in the Leaders section of the print edition under the headline “When duty falls”
From the March 26th 2022 edition
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