Fuel Tax Research Articles

Policy analysis to maximize the firm value: performing firm valuation using system dynamics

PurposeThe purpose of this study is firm value management through corporate finance policy design and scenario analysis to maximize the firm value.Design/methodology/approachThe study develops a system dynamics model for an oil firm and incorporates the financial and physical processes to perform the firm valuation. The model is simulated under the current and alternative investment, capital structure and dividend policies of the case firm, assuming different oil and gas price and tax rate scenarios to identify which combination of policies maximizes the firm value.FindingsThe simulation results suggest that lowering the volume of investments, increasing the debt ratio and reducing the dividend payments from the current level increases the share price, given increased oil and gas price expectations and lower tax rates. However, the total firm value outperforms with increased investments toward the end of the simulation period. In case of decreased oil and gas price expectations, lower volume of investments, lower debt ratio and lower dividend payments increase the share prices, given lower taxes.Originality/valueThis study entails significance as it provides a comprehensive financial planning model for an oil firm, which incorporates the complex interactions of key financial and physical processes of the firm. The study contributes to debates on corporate finance policies by integrating multiple theories, accounting for accumulation processes and feedback loops and their non-linear interactions. The study proposes the consideration of combined impact of policies for firm value management.

Thinking Beyond the Gas Tax: A Case Study Analysis of a Road User Charge System for Texas

Surface transportation funding in the U.S. is heavily reliant on fuel taxes that are becoming less effective as fuel efficiency increases and alternative fuel vehicles become more common. This report examines the benefits and challenges of using road user charges (RUCs) of various types to address this issue, before analyzing the potential revenue from a hypothetical RUC on four urban corridors within Texas. Common issues for RUCs are discussed, which include privacy, interstate coordination, and program administration. A range of possible options for RUCs are discussed, followed by an analysis of four corridors in the following counties: Bexar, Collin, Harris, and Lubbock. Data from TTI’s Urban Mobility Report on VMT were utilized along with vehicle registration data from TTI’s TRENDS model to estimate an average miles per gallon for each county based on the local fleet. Three scenarios were then developed including a revenue recovery scenario, a variable pricing scenario, and a carbon tax scenario. This report concludes with a discussion of the scenario results. Specific challenges and barriers for each scenario are discussed along with a discussion of the data sources and privacy trade-offs.

Environmental Taxation and Green Economics in Southeast Asia

This research aims to simulate models of taxes across Southeast Asia by inserting var models such as environment and gasoline fees. This study is for getting the idea that Southeast Asia imposes an environmental fee based on a regression model derived from Southeast Asia's energy consumption and CO2 emissions adjusted by a 10% additional tax (as a dummy variable). This study was motivated by the European Union's policy suggestions on environmental fees, which could be implemented by Southeast Asia. The log-t methods are used in this study, which allows clustering by countries into additional clubs or convergence groupings, and also for utilizing the test for converging within some panel’s states taking into account the variable’s panel data. We believe that environmental fees are an essential public policy tool in Southeast Asia for reducing CO2 emissions as well as the effects on pollutants. Gas tax or carbon pollution tax upon the energy and transportation industries have a substantial influence on raising tax collections in addition to economic expansion within Southeast Asia. Power tax could help to fund initiatives that utilize ecologically good energy while limiting the prohibiting the utilization of natural gas or eco-friendly power. In the transportation industry, the environmental taxes’ function is to reduce emissions of carbon dioxide caused as a result of less environmentally friendly public transport, as well as to support eco-friendly transport.

A compensation mechanism for air pollutants generated by tourism-related land-based transportation: An exergy-based case study from Macao

This paper discusses the compensation standard for exhaust pollution and devises a compensation mechanism for Macao's tourism-related transport sector based on an integration of chemical exergy and universal exergy, using data on gasoline consumption by automobile sector retrieved from the transportation industry. The results reveal that: (1) the exergy values of air pollutant emissions increased from 1.53 × 1012 kJ in 2010 to 2.03 × 1012 kJ in 2019 (an increase of 1.33 times), and the exergy of CO, NOx, and SO2 emissions accounted for 77.5%, 20.4% and 2.1% of total exhaust emissions in Macao respectively. (2) In 2019, the monetary value of emission exergy, and the environmental costs of air pollution, were 1.7 times greater than in 2010. (3) If Light Rail Transit is compensated for, then the mean interval's values of the upper and lower limits of the compensation standard are 0.55 USD and 0.05 USD, respectively. When gasoline tax is used as a means of compensation it is necessary to raise its rate by about 8% based on the tax rate. A three-stage bargaining game model is used to provide evidence that this compensation standard is practical and acceptable.

Introduction to the special issue on mobility, climate change, and economic inequality

Introduction to the special issue on mobility, climate change, and economic inequality

Особенности налогового регулирования нефтегазового сектора экономики в условиях высокой волатильности энергетического рынка

ABSTRACT The relevance of the article is due to the need to improve the methods used for tax regulation of the oil and gas sector of the economy (NGS) in conditions of high volatility of the energy market. The subject of the study is the tax regulation of the NHS. The purpose of the work is to develop modern tools for substantiating tax innovations in the oil and gas industry. In the course of the study, the analysis of the theoretical foundations of the OGC was carried out, the objects of the OGC were established, the levels of differentiation of tax regimes of subsurface areas were considered, digital tools for carrying out calculations in the form of a pilot information system were proposed. As a result of calculations made using iterative calculations of the automated core of the information system based on the tax model using the python programming language, the conclusion was confirmed that the main object of tax regulation of the OGC is the tax regime of the subsoil area, which needs further improvement to ensure timely payments to the budgets of the budgetary system of the country. The novelty of the work consists in the development of a scheme of objects and levels of tax regulation of the OGC, the introduction and justification of the concept of the tax regime of the subsoil area, the development of a schematic diagram of the information system of oil and gas taxation. Keywords: tax regulation; oil and gas taxes; mineral extraction tax, tax on additional income from the extraction of hydrocarbons; information system

De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs

De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs

The effectiveness of the tax system in promoting General revenues in Algeria -Analytical study 2000-2015.

Through this study we analyzed the evolution proceeds of tax revenue and its place in the General State budget and development of indicators of fiscal pressure and regular revenue coverage for expenses of the propulsion, And reached the low level of fiscal pressure outside, and the dominance of petroleum taxation to the budget during the study period 2000-2015, as a result of poor performance and ineffective tax system despite reforms since the year 1992.

Changing Prices in a Changing Climate: Electoral Competition and Fossil Fuel Taxation

When do governments adopt ambitious climate policy? Charting the theoretical territory between climate change politics and long-term policymaking, this paper highlights the role of electoral competition in shaping how politicians respond to the intertemporal tradeoff of one important climate change mitigation policy: fossil fuel taxation. The more secure the government is in office, the more insulated it is from the vagaries of political competition, and the more likely it is to impose costs on constituents today to generate a future stable climate. By influencing governments’ time preferences, competition structures the myopia of elected officials. I test the arguments using an original dataset of gasoline taxation across high-income democracies between 1988 and 2013. I find evidence that higher levels of electoral competition are associated with lower gasoline tax rates, and that the relationship is moderated by the level of costs imposed on voters, but not government partisanship. More generally, the analysis highlights when governments can increase consumer prices to address long-term challenges.

Political leadership has limited impact on fossil fuel taxes and subsidies

For countries to rapidly decarbonize, they need strong leadership, according to both academic studies and popular accounts. But leadership is difficult to measure, and its importance is unclear. We use original data to investigate the role of presidents, prime ministers, and monarchs in 155 countries from 1990 to 2015 in changing their countries' gasoline taxes and subsidies. Our findings suggest that the impact of leaders on fossil fuel taxes and subsidies is surprisingly limited and often ephemeral. This holds true regardless of the leader's age, gender, education, or political ideology. Rulers who govern during an economic crisis perform no better or worse than other rulers. Even presidents and prime ministers who were recognized by the United Nations for environmental leadership had no more success than other leaders in reducing subsidies or raising fuel taxes. Where leaders appear to play an important role-primarily in countries with large subsidies-their reforms often failed, with subsidies returning to prereform levels within the first 12 mo 62% of the time, and within 5 y 87% of the time. Our findings suggest that leaders of all types find it exceptionally hard to raise the cost of fossil fuels for consumers. To promote deep decarbonization, leaders are likely to have more success with other types of policies, such as reducing the costs and increasing the availability of renewable energy.

Efforts to tax carbon in Washington State

This paper explores the determinants of carbon taxation by focusing on recent efforts to tax carbon in Washington State. The paper identifies citizen demand, energy interests, and tax structure as possible factors in the emergence of carbon taxation. Washington has relatively high demand for climate action, and is unique with respect to its high reliance on indirect taxation and its low level of local fossil fuel interests. I argue this context, especially the high reliance on indirect taxation, makes taxation more appealing than other carbon pricing alternatives. I then test whether local tax structure shapes preferences for carbon taxation using county level opinion data. I find evidence that support for carbon taxation is higher in states with higher gasoline taxes, but no effect from sales and sin taxes. I conclude summarizing various accounts of each initiative’s failure, and highlight a few lessons from the efforts to tax carbon in Washington state.

What cities have is how people travel: Conceptualizing a data-mining-driven modal split framework

As city-level modal splits are outcomes of city functions, it is essential to understand whether and how city attributes affect modal splits to derive a modal shift toward low-emission travel modes and sustainable mobility in cities. This study elucidates this relationship between modal splits and city attributes in 46 cities worldwide, proposing a two-step data mining framework. First, using the K-Means method, we classify cities into private-vehicle-, public-transit-, and bicycle-dominant groups based on their modal splits. Second, we categorize city attributes into environmental, socio-demographic, and transportation planning factors and quantify their interlocked impacts on cities' modal splits via the decision tree method. We observe that the socio-demographic factor has the highest impact on determining the cities' modal splits. In addition, high population density and employment rate are positively associated with low-emission travel modes. High gasoline tax and low public transit and taxi fares often make people reconsider possessing private vehicles. On the other hand, extreme weather conditions (e.g., hot temperatures) can prevent bicycle usage. Our contribution expands the impact of introduced city planning and policies for modal shifts toward a real-world paradigm and we present implications of the proposed framework in developing practical modal shift strategies.

Distribution of Highway Infrastructure Cost Responsibility and Revenue Contribution Shares Among Highway Users in North Carolina: Present Conditions and Future Alternatives

As the proportion of fuel-efficient and electric vehicles is rapidly increasing, US states are challenged to meet the greater needs of the aging transportation infrastructure with less funds. The purpose of this study is to support state authorities in understanding the equity implications, feasibility, and effectiveness of many of the currently available transportation funding mechanisms. To fulfill this objective, the study analyzes data from North Carolina (NC) between 2014 and 2017. As a first step, we estimate and compare the transportation infrastructure cost responsibility and revenue contribution of NC highway users. Results indicate that lightweight vehicles contribute substantially more to the revenue compared with their share of cost responsibilities. Single-unit trucks with four or more axles and multi-unit trucks are found to underpay their cost responsibilities by 37% to 92%. We use these results in combination with previous research to assess different scenarios for funding transportation infrastructure in the future. Each alternative is evaluated for its revenue generation potential, equity-related improvements, applicability, and public acceptance. Findings suggest that a moderate increase in traditional taxes such as motor fuels tax, vehicle sales tax, or the state sales tax are practical and reasonable approaches for generating significant additional revenue in the short run without strong opposition from the public. However, all the scenarios analyzed by this study, which are based on tax and fee structures planned or implemented in the USA, are found to have minor impacts in improving equity between the cost responsibility and revenue contribution across vehicle classes.

Why Do Governments Tax or Subsidize Fossil Fuels?

Governments have long faced pressure to address the climate crisis by increasing taxes on fossil fuels. It is unclear how they have responded. Fossil fuel taxes and subsidies are hard to measure and often hidden in complex policy instruments. We collect and analyze an original high-frequency measure of gasoline taxes and subsidies, covering 157 countries. Our analysis yields three findings: despite rising alarm about climate change, from 2003 to 2015 there was little change in net fuel taxes and subsidies at a global level; these taxes and subsidies appear to be driven by the same fiscal conditions that determine other types of taxes; and reforms are overwhelmingly associated with idiosyncratic country-level conditions. These patterns suggest that fossil fuel taxes are determined by a country’s revenue needs, not its political institutions or environmental commitments. They also have significant implications for debates over policies to reduce greenhouse gas emissions.

Studies on the impact of road freight transport and alternative modes in Australia: a literature study

The freight sector in Australia has been growing at an ever-increasing rate due to domestic and international demand for goods, commodities, and resources. Increased volume of traffic comes with increased greenhouse gas. Greenhouse gas impacts climate change and air pollution, increasing the risk of public health and safety. The European Union used Marco Polo to shift transit freight from road to sea, rail, and inland waterways to reduce the number of trucks on the road to lessen congestion, less pollution, and more reliable and efficient transport of goods. Fuel Tax Credit was similarly introduced in Australia to address some of these issues. It is now time to analyse the impact of these schemes. This paper is a systematic literature review using the Mixed Method Appraisal Tool and Critical Appraisal Skills Programme. Findings include using alternative modes of transport for long distances reduces carbon dioxide and the likelihood of using renewable fuels like electric and hydrogen fuel for trucks. However, research was limited on renewable fuels.

Comparative analysis of tax regimes Effectiveness in oil Production

The paper deals with the problems of the method of comparative analysis of the tax regimes in the field of oil production in order to create instruments for making operational decisions on its basis by oil and gas companies. The author shows that for hard-to-recover reserves, when reducing coefficients apply to the MET rate (for the period of their validity), the basic taxation regime is more effective than the AIT regime. It also substantiates the expediency of conducting a comparative analysis of the tax regimes used in the production of hydrocarbons using the Discounted Petroleum Taxes (DPT) indicator, which reflects the discounted amount of taxes (in constant prices per 1 ton of oil) in periods corresponding to the validity of project documents for the development deposits and the term of the license for the use of subsoil. The author proposed the approach to a comparative assessment of the effectiveness subsoil plots to the AIT regime at increasing the efficiency and validity of tax planning in the oil and gas industry. The research used such general scientific principles and methods as systematization, analysis (including structural-dynamic), as well as deduction.

Evaluation of research and development subsidies and fossil energy tax for sustainable development using computable general equilibrium model

AbstractPolicy‐making in improving the quality of the environment and social welfare and increasing the rate of economic growth to achieve sustainable development has been considered by policymakers in recent years. Punitive policies such as taxes on fossil energy consumption and incentive policies such as subsidies for investment in research and development are among the policies used to achieve sustainable development goals. In this study, using a computable general equilibrium model, two scenarios of subsidy to investment in research and development and subsidy with the taxation of fossil fuels, to double the ratio of investment in research and development GDP have been considered. First, the subsidy rate required to invest in research and development to achieve this goal is determined, and then, the economic, welfare, and environmental effects of the policies implemented are examined. This study shows that in the first scenario, the subsidy rate required to invest in research and development to achieve this goal is 10.74% and in the second scenario is 10.21%. Meanwhile, the required tax rate in the second scenario is estimated at 2.5% of fossil energy consumption. The results show that both the fossil energy tax policy and the research and development subsidy policy are able to reduce energy consumption, air pollution, and social welfare. The reduction in welfare in both scenarios is regardless of the social benefits of reducing greenhouse gas emissions.

Pengaruh Pendapatan Asli Daerah, Dana Alokasi Umum, dan Dana Bagi Hasil terhadap Belanja Modal pada Daerah Pemekaran di Provinsi Jambi

Local taxes are the obligation of citizens to finance various regional needs to carry out regional development. This is an important benchmark for contributing to increasing local revenue in implementing regional autonomy. This study aims to determine how much the contribution of provincial taxes in increasing local revenue (PAD) in Jambi province. Based on the result of the analysis contribution and Analysis Process Hierarchy (AHP), get the results of the research in the form that of the five (5) province taxes that greatly contribute to increasing local revenue, namely Motor Vehicle Tax, Motor Vehicle Transfer Fee Tax and Motor Vehicle Fuel Tax. These three taxes greatly contribute, which for motor vehicle taxes in 2017-2019 or the last 3 years can contribute 27.91%, motor vehicle transfer fees tax contributes 22.67% and motor vehicle fuel taxes contribute 19.39 % . Meanwhile, the other two taxes, the surface water tax and the cigarette tax, began to contribute to local revenue (PAD), although their contribution was not very large.

Analysis of the Contribution of Motor Vehicle Fuel Taxes to Regional Original Income at the Regional Tax and Retribution Management Agency of North Sumatra for the 2015 – 2020 Period

When regional autonomy was implemented, local government had control over the region. Local government could work because of local revenue. Without the local revenue, local government could not operating their programs. The higher the local income, the more possibility the region will be prosperous. Local revenue divided by two, there are original from region local revenue and granted revenue. Local revenue is obtained from local taxes. One of the local taxes is vehicle fuel tax. The contributions of vehicle fuel tax could be influence the original from region local revenue.

Natural gas as a vehicular fuel in Brazil: Barriers and lessons to learn

This study aims to analyze the adoption and growth of light-duty natural gas vehicles in Brazil and observe how state incentives and taxes impacted the development of this market at the state level. Brazil's light-duty natural gas vehicles market has slowed its growth considerably since the states with the largest share in the country, Rio de Janeiro and São Paulo, have diverged in the progress of natural gas vehicles. To clarify what led to this scenario, we selected and explored seven parameters: i) availability of natural gas distribution network; ii) the number of certified conversion garages; iii) historic compressed natural gas fuel prices; iv) state value-added taxes; v) motor vehicle property taxes; vi) vehicle-to-refueling-station index and; vii) payback period. In conclusion, it was found that state market incentives are fundamental for the continuous development of alternative fuels such as natural gas to the already established liquid fuels in the country. In Rio de Janeiro, the advantages obtained through tax incentives to compressed natural gas and motor vehicle property taxes are crucial to decrease payback time and strengthen the price of natural gas. Otherwise, in the state of São Paulo, the lowest state value-added tax levied on hydrated ethanol and, consequently, the smallest price difference between fuels hinders the development of the compressed natural gas market.