Following the discussion concerning an eco tax reform, as suggested by the Greens, the topic of fuel tourism is another area where the Greens want changes.
All three prospective coalition partners made mention of fuel tourism in their election programmes, but none provided specific measures or policies for dealing with the issue.
Fuel excises were introduced years ago, but no government has made definitive strides in rejecting tax revenue from fuel. To date, there are also no measures to allow a progressive reduction of the Grand Duchy's fuel tourism.
In November 2016, Dr. Dieter Ewringmann presented a study of Luxembourg's fuel tourism. According to Ewringmann, the costs of selling fuel far outweighed the profits emerging from fuel tourism: the cost of air, sound, and emission pollution and the damage caused to the environment amounts to €3.5 billion. Meanwhile, the tax revenue from fuel sales is €2.1 billion. Ewringmann's study was based on statistics from 2012 and argued that the country consistently overestimates the profits from fuel tourism.
His study demonstrated the overestimation of this phenomenon, citing that fuel tourism only contributed 4% towards health and environment expenses in 2012. The main issue in the years following Ewringmann's study is the burdensome nature of diesel fuel.
Dr Ewringmann's study did not have any specific measures or recommendations to resolve the issue of the damage originating from the fuel industry. The government did put an inter-ministerial task force together, including representatives from the ministries of sustainable development and infrastructure, finance, and the economy, alongside representatives from Statec and customs officers. The aim of the task force was to create a general policy for fuel sales.
The task force should have created specific measures to slowly reduce fuel sales and find compensation for the loss of tax income as well as find alternative models, such as taxes on electric forms of transport. To date, nothing specific has emerged from the task force, at least in the form of definitive conclusions addressed to the public.
What has emerged from the task force are interim results and potential avenues to explore. These will be the bases of the corresponding coalition task forces in the next few weeks.
To see how these task forces will discuss the issue, it is worth recalling the parties' election programmes. As iterated earlier, these did not have very specific measures. The Democratic Party only advocated a slow exit from fuel tourism, emphasising that the party does not want to introduce hurried measures that would lead to a rapid drop in fuel tax revenue. This appears to show that the DP does not want to introduce a substantial rise in fuel prices, particularly as the party has already butted heads with the 'Groupement pétrolier'.
The Green Party, for whom fuel tourism is a core topic, did not have a specific policy in mind either. The party's programme did cite Ewringmann's fuel tourism study, arguing that the next government should base its policies on the study.
As for the LSAP, the party proposed a tax of €25 on electric cars, but remained sceptical of raising fuel prices. If fuel sales were to move to Luxembourg's neighbours, this would have a positive effect on Luxembourg's environmental results. However, it would also mean that this tax revenue would vanish from the Grand Duchy, which is why the LSAP proposed that profits from fuel tourism should be invested into forward-looking projects that endeavour to emphasise the country's independence from fuel imports.