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USA businesses enjoying some of the world’s lowest fuel costs, according to UHY study: 12% tax on diesel among the lowest rates of any country 

The USA enjoys some of the lowest gasoline pump prices among the major world economies, according to a new study by UHY, the international accountancy network.

UHY explains that the USA has an extremely low tax rate on fuel, levying just 13% on gasoline and 12% on diesel, considerably less than many other major developed economies, in particular European countries.

This means that the cost of filling the tank * of a Ford Transit van with diesel in the US is $83.48 USD, less than half the cost in the UK, where the price of diesel is highest.

The cost of filling the tank of a Ford Transit van with gasoline in the US amounts to $75.16 USD, less than half the cost of filling up in Denmark, where gasoline prices are highest.

UHY says that as diesel is used in the majority of commercial vehicles, this comparatively light tax burden is good news for businesses. **

In comparison, the UK, France and Germany all levy taxes of at least 60% on gasoline, and between 40-60% for diesel.

UHY says that while environmentalists argue that fuel taxes are important in cutting greenhouse gas emissions, the transport lobby and small and medium businesses say that keeping the costs down is vital for all businesses.

UHY adds that this study is a reminder of the importance of maintaining tight control on the levels of business taxation, especially as the recovery from recession starts to gather pace.

Scott Miller, Partner and National Petroleum Practice Leader of UHY LLP, says: “Taxes on fuel are an area in which the burden on US businesses is far lighter than in many other countries, which is likely to be a significant boon in helping to stimulate growth and speed up our recovery from the recession.”

“The United States is already quite a distance ahead of the UK, France and Germany in its economic recovery, and its lower levels of taxation in areas like fuel may well be helping to stimulate growth.”

“Keeping taxes on diesel low is particularly beneficial for fast-growing small and medium businesses that run fleets of commercial vehicles, especially in sectors like distribution and retail. These businesses can be key drivers of economic recovery.”

However, UHY points out that the federal fuel tax, unchanged for 20 years, is under pressure. The United States currently levies a federal fuel tax of 18.4 and 24.4 cents per gallon on gasoline and diesel, which alongside state taxes on fuel consumption contribute to an average US fuel tax of 13% on gasoline and 12% on diesel.

In late 2013, a proposal was introduced in Congress to increase that fuel tax to 33.4 cents per gallon on gasoline and 42.8 cents per gallon on diesel.

Scott Miller explains: “Increasing the federal fuel tax is a political challenge that few US politicians would be enthusiastic about. While some argue that a fuel tax increase is needed to fund transportation infrastructure, others maintain any tax increase would be a drag on the economy. At the state level, with decreasing gas consumption and increasing infrastructure costs, many states are considering gas tax increases or other tax changes to make up for the lost gas tax revenue."

Filling the tank of a Ford Transit with diesel – proportion of cost made up of fuel cost and tax (US $)

Filling the tank of a Ford Transit with gasoline – proportion of cost made up of fuel cost and tax (US $)

Filling the tank of a Ford Transit with autogas – proportion of cost made up of fuel cost and tax (US $)
* Tank size: 80 litres for petrol and diesel, 72 litres for LPG.
** Tax rates include VAT, some or all of which may be reclaimed by businesses in some countries, including EU member states