Bio-fuels bill to result in lower excise on petrol

The government yesterday proposed to cut excise tax on petrol by about zł. 1 billion a year as part of a new bio-fuels bill, Agriculture Minister Adam Tański said. The Cabinet approved a bill forcing retailers to sell petrol with a set minimum of bio-components, such as bio-ethanol, after President Aleksander Kwaśniewski vetoed the previous bio-fuels legislation amid criticism from consumer groups. The new bill is expected to please the increasingly euro-skeptic agricultural lobby ahead of June's referendum by guaranteeing farmers stable demand for crops used to produce petrol ad ditives. The bill, which now goes to parliament for scrutiny, sets an obligatory minimum bio-component to petrol at 4% as of 2004. From October to December 2003, bio-fuels will have to amount to 3.5% of petrol sold. Tański said the government planned to cut the excise tax on petrol to prevent the new bill from boosting fuel prices. Although the move is expected to cost the budget about zł. 1 billion annually in lost revenues, by 2007 it should add about zł. 150 million a year in income and will create 70,000 new jobs in the farming sector. (Reuters) A.K.