Thursday 8 December 2016

New hikes see cost of running family car to hit €100-a-week

Treacy Hogan, Paul Melia and Mark O'Regan

Published 30/01/2012 | 05:00

THE cost of running a typical family car has passed the €100-a-week mark for the first time.

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Hard-pressed motorists will have to fork out an additional €400 this year because of a raft of extra costs imposed by the Government.

Hikes in petrol, diesel, car tax, VAT, carbon taxes and the insurance levy to prop up the Quinn Group are responsible for the extra costs.

The real running cost of a typical car, based on an Irish Independent investigation, will run to €5,251 for this year; up more than €400 on the €4,846 cost for 2011.

The cost excludes depreciation in the value of the car.

According to our investigation, fuel accounts for the biggest chunk of the increased cost, with the average petrol bill set to rise by €222 this year, and diesel by €333.

Most of this is due to extra carbon taxes and VAT.

Motor tax on the typical car has also risen by between €25 and €69, depending on whether the vehicle is taxed based on its emissions or, for vehicles pre-2008, on the engine size.

The 2pc insurance levy that kicked in this month has also added €11 to the average motor premium of €549, bringing this up to €560.

Tolls have also risen by 10c on most motorways, while daily parking charges have gone up by €1 at all rail stations.

The VAT hike has also added to the cost of car replacement parts such as tyres.

Fuel prices of €1.60 a litre are also looming, due mainly to the fall in the value of the euro against the dollar, the currency used for buying oil on the international markets.

The extra costs will add to the strain on families already struggling with the prospect of a €100 household charge; septic tank charges for rural dwellers; domestic water charges and property taxes coming down the track.

The figure for the total annual outlay takes in the cost of petrol, insurance, motor tax, service/repairs, parking charges, tolls, car washes, driving licence fees and the NCT.

And the cost will rise even further with increased oil prices on the cards. However, it is too soon to say how much it will cost motorists at the pump.

Natural Resources Minister Pat Rabbitte said the EU embargo on oil imports from Iran, which is supported by the Government, would have some impact on the price of oil here, but given the number of variables involved, this is impossible to quantify at this stage.

However, the Irish Road Haulage Association (IRHA) warned that the current crisis was a "tipping point" and would cost Ireland "hundreds of millions of euro" if immediate action was not taken.

"In the past month, petrol has increased by 10c a litre, which is strangling business in this country. We've lost 1,300 hauliers in the past 12 months because of the rising cost of fuel," said Eoin Gavin, president of the IRHA.

"Thirty per cent of the fuel in Ireland is illegal and the higher it costs at the pump because of the Iranian embargo, the more supplies are going to be driven underground, which will in turn cost the Exchequer millions," Mr Gavin warned.

"We started negotiations with the Department of Finance in July last year and explained that a rebate scheme should be introduced," he added.

Under a fuel rebate scheme, hauliers would be able to get an annual tax rebate on a portion of their diesel bills. The idea is that more hauliers would be encouraged to buy their fuel in the Republic, instead of filling up abroad, where lower fuel taxes apply.

But Finance Minister Michael Noonan has said that if a similar rebate was introduced in Ireland it would cost the Exchequer huge sums in lost tax revenues.

"Petrol prices are averaging €1.57 at the moment. A couple of months down the line we're looking at €2 a litre," Mr Gavin said.

"Laundered fuel is being sold by criminals and it's costing the country €600m. The export industry is the only show in town at the moment and is the only thing that will bring us out of this recession," he said.

Irish Independent

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