Fuel taxation increases at the beginning of 2017

Press release 16 Dec 2016

Fuel taxation increases at the beginning of 2017. Originally, the government proposed the increase in taxation already in its spending limits discussion last spring, after which the details of the tax increase have been worked on.

The level of taxation of motor fuel and the biofuels replacing it will increase three percent on average, raising the tax on fossil fuels to 70.25 cents per litre. The increase of the level of taxation of diesel oil and the biofuels replacing it will be approximately five percent and the tax on fossil diesel will be 53.02 cents per litre after the increase.

According to calculations by the Ministry of Finance, an increase of slightly over two cents per litre in the taxation of petroleum and diesel oil means an additional expenditure of approximately 30-35 euros annually for the average car owner.

For sulphur-free light fuel oil, the increase in the taxation level will be approximately seven percent on average and the tax on light fuel oil will be 22.87 cents per litre after the increase. For example, in a house with an annual heating oil consumption of 2000 litres, the tax increase means an annual 35 euros increase in expenses.

Levying an excise duty on liquefied petroleum gas used in motors and heating was begun at the start of 2016. The tax will increase at the start of 2017 after which it will be 26.65 cents per kilogram. The purpose of use is decisive for the taxation of liquefied petroleum gas. For example, using liquefied petroleum gas in households and certain industrial processes, for heating premises and as the fuel of forklifts and working machinery is liable to taxation.

When estimating the significance of the tax increases in a motorist’s and an oil heater’s annual expenses, it should borne in mind that in addition to the taxation, the consumer prices of petrols are affected by several variables such as the world market prices of oil products, exchange rates and local competition.

In the year 2015, a total of 2.91 billion euros of excise duty was collected for liquid fuels. This amounted to the highest income item in taxes collected by Customs. The taxation of petroleum, diesel oil and fuel oils was previously increased at the beginning of 2015. The taxation of light fuel oil additionally rose at the beginning of 2016.

-The taxation of liquid fuels is already on a high level which decreases the citizens’ purchasing power. This tax increase compensates for the repeal of the ice cream and sweets tax which created a significant deficit in the budget. In this situation, also, the Finnish Petroleum and Biofuels Association emphasises the significance of equal and technology-neutral taxation of traffic fuels. All fuels used in traffic should be taxed in accordance with their carbon dioxide emissions and energy content, states Helena Vänskä, managing director at FPBA.

The fuel tax is a fixed tax denominated in euro

The fuel tax consists of energy content tax, carbon dioxide tax and a strategic stockpile fee. This time, the tax increase is falls upon both energy content and carbon dioxide tax components.

The amount of fuel tax is determined in the excise tax legislation as cents per produced litre or kilogram and is thus not dependent on price. Since the fuel tax is fixed, its percentage of the consumer price fluctuates with the consumer price.

The strategic stockpile fee is an earmarked tax-like payment made to the National Emergency Supply Fund.

The value added tax is 24 percent of the product's VAT-free price or approximately 19 percent of the consumer price. The value added tax is paid of the fuel’s total price which also includes the excise tax.

Further information: Finnish Petroleum and Biofuels Association, Helena Vänskä, managing director, tel. +358 (0)40 581 6786


Finnish Petroleum and Biofuels Association is the collective industry association that represents the interests of its members.  The mission of the Association is to actively promote responsible use of liquid fuels and contribute to a sustainable energy future, while forging a favourable operating environment for it´s members. The Oil Industry Service Centre Ltd, owned by the association, executes the energy efficiency agreement Höylä and carries out industry-wide environmental and education projects. Website www.oil.fi

Finnish Petroleum and Biofuels Association | Unioninkatu 22 | 00130 Helsinki  |  Finland  | office@oil.fi