Canada mulls diesel tax cut: report

Mon Aug 25, 2008 10:49am EDT
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OTTAWA (Reuters) - Members of the Conservative government have discussed cutting the diesel fuel tax, the National Post said on Monday, as the Liberal Party is proposing to increase taxes on diesel and other fossil fuels.

However, it quoted the office of Prime Minister Stephen Harper as denying a diesel tax cut was in the works and the newspaper said the Finance Department opposed the idea.

The excise tax of four Canadian cents a liter of diesel (14 U.S. cents per U.S. gallon) brings in about C$1 billion a year.

The differing plans for the tax comes as speculation ramps up that the Conservatives could call an election shortly.

($1=$1.05 Canadian)

(Reporting by Randall Palmer; Editing by Scott Anderson)

<p>An attendant holds a petrol nozzle at a petrol pump in the northeastern Indian city of Siliguri August 5, 2008. REUTERS/Rupak De Chowdhuri</p>