Growth plan: revenue from excise duty on fuel will help the road construction

The Cabinet has found an additional source of funding for road construction. To improve the existing road network and new will receive the money raised by increasing excise tax on fuel.

How will the increased excise tax?

Every year the excise tax on fuel increases to the inflation rate. This rule is enshrined in the Tax code. That is, in 2018, the excise tax should increase by about 4% (so inflation predicts the Ministry of economic development). Such an increase will increase the cost of gasoline is about 30 cents per liter, and diesel fuel by 23 cents per litre. The budget will receive 25 billion rubles.

But the government decided in 2018 to raise the excise tax by 50 cents per liter, and do it twice — from 1 January and 1 July. The proposal to the Cabinet of Ministers asked the Ministry of Finance, said the head of Department Anton Siluanov.

Where will be spent revenues from unplanned increase in the excise tax?

The increase in excise duties on fuel will give to the Russian budget approximately 60 billion rubles in 2018 and 80 billion in 2019-2020, said TASS Deputy Minister of Finance of the Russian Federation Ilya Trunin.

At the same time, the head of Department Anton Siluanov estimates that the additional income is more modest — about 40 billion rubles next year. “This money will go towards improving the transport infrastructure of our drivers,” — he said.

Earlier, the Minister said that dopsredstv will focus on the development of the road network, primarily in the Crimea and in Kaliningrad.

It is, above all, on the tracks “coastal ring” in the Kaliningrad region and the “Tavrida” in the Crimea.

Also the extra money will replenish the budgets of the regions. Until June 1, 2016, all of the excise tax on fuel received in the budgets of the constituent entities of the Federation. After this period, 12% are credited to the Federal budget, the remaining funds remain on the ground.

How much more expensive fuel?

The Ministry of Finance and the Ministry believe that due to the unplanned increase in the excise duty of fuel at the pump could rise by 1.5% or by 60 cents, as adjusted for inflation, the average price of fuel next year could exceed 40 rubles, write “Vedomosti”, citing a source in the Federal government.

Experts do not rule out more significant price increases. According to the Director of the Moscow oil & gas center Ernst&Young Denis Borisova, just because of the fuel excise tax next year will rise in price more than on 1,5 roubles, writes “Kommersant”.

Despite the fact that the excise tax will increase only in 2018 that the effect of his upcoming growth will be noticeable sooner, said in an interview with TASS Director of the Institute of strategic analysis FBK Igor Nikolaev. The sellers of fuel will provide this increase in the price in advance. The price per litre of 92-octane gasoline will exceed the mark of 40 rubles, a liter of 95 octane can already be found at a price of 42 rubles, he said.

Also the increase in the excise tax on fuel may add 0,2–0,3% to the level of annual inflation, said Nicholas.