Carbon tax 'would drive people north'
PROPOSALS to introduce a carbon tax on fuel to encourage a switch to public transport will only result in people driving across the Border for cheaper petrol and diesel, a motoring organisation claimed yesterday.
The Automobile Association said the carbon levy of 5c per litre of petrol and diesel due to be introduced in Wednesday's Budget was only a hike in excise duty rates by another name and would do nothing to change motorists' behaviour.
"Giving a tax increase a politically correct name does not change that reality," spokesman Conor Faughnan said.
"Seventy per cent of the retail price of fuel is already tax. In October of 2008 there was 8c per litre added to petrol excise duty; 5c per litre was added to diesel last April. Why not call those increases a carbon tax?
"Ireland knows from recent experience that fuel use is astonishingly inelastic in response to price movements. In the course of 2008 petrol prices went from a low of 94c (per litre) in January to a high of 144c in July. This did not make the slightest difference to usage and there is no reason to expect that a state-applied price increase will be any different."
The cost of petrol and diesel had already risen in the past month. A litre of petrol costs an average of 118.7c, up by 3.1c from last month, while diesel sells for 108.9c, a hike of 3.6c.
- Paul Melia
Irish Independent
