Business Irish

Friday 9 December 2016

AA calls for end to emergency fuel tax as drivers pay €400 more per year

Published 16/12/2015 | 02:30

Pump prices have hit a five-year low due to the collapse in crude oil prices. But prices would be even lower if it was not for the fact that the State takes 70pc of the price in taxes, the AA said.
Pump prices have hit a five-year low due to the collapse in crude oil prices. But prices would be even lower if it was not for the fact that the State takes 70pc of the price in taxes, the AA said.

Emergency taxes imposed on petrol and diesel are costing motorists up to €400 a year and should be removed, the AA said.

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Pump prices have hit a five-year low due to the collapse in crude oil prices. But prices would be even lower if it was not for the fact that the State takes 70pc of the price in taxes, the AA said.

The emergency Budgets between 2008 and 2012 saw about 20c added to the cost of petrol and 18c added to the cost of diesel, AA Ireland's Conor Faughnan calculated.

He said this had added €400 to the cost of petrol for a driver every year and €360 for someone with a diesel car.

The Exchequer gets around €2bn a year in fuel tax. The high proportion of the cost of a litre of petrol that is made up of excise duty and value-added tax was the main reason that the collapse in crude prices was not translating to even lower prices at the pumps.

The weak euro against the dollar is also holding back price-fall gains for drivers.

Crude oil fell below $35 a barrel in New York yesterday, a seven-year low. Last year, crude was trading at $100 a barrel.

This meant that the average price of a litre of petrol and diesel was now cheaper than at any time since March 2010, the AA said.

But fuel taxes are imposed by the litre in this country, which means that when wholesale prices fall, the taxes do not.

Irish Independent

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