Homeowners and motorists to feel the pain of new charges
Thursday December 10 2009
MOTORISTS will be hit with a hike in fuel prices from today when petrol will rise by 4 cent per litre and diesel by 5 cent.
Homeowners can expect further pain next May when the carbon tax is applied to oil and gas, which will add €50 to householders' annual bills.
The Government expects to take in €330m every year by penalising those who use fossil fuels, including petrol, diesel, peat briquettes and coal.
The ESRI says the overall impact on households will be up to €3 per week.
Based on a tax of €15 per tonne of carbon dioxide emitted by burning fossil fuels, motorists can expect to pay €72 extra per year in fuel bills.
The increase comes on top of an 8 cent per litre increase on petrol in October 2008, and a 5 cent diesel hike last April.
A bale of briquettes will rise from €3.85 to €4.24.
A year's supply of natural gas will rise from €800 to €847.86 and a tax of €52.15 will be applied to a delivery of 1,000 litres of home heating oil, which currently costs €600. €1.79 will be added to a 40kg bag of coal, which currently costs €16.20.
Phased
The carbon tax is being introduced on a phased basis, with transport fuels increasing immediately and liquid fuels and home heating fuels to increase on May 1 next.
Solid fuels, coal and peat will be taxed from September 1 next.
The delay is because the Department of the Environment must address concerns about lower-quality fuels, which are exempt from the levy, being imported from Northern Ireland.
The AA said the tax on fuel was an "added incentive" for motorists to cross the border to re-fuel.
"Whether it is called a carbon tax or not, it is, in effect, just a price rise," spokesman Conor Faughnan said.
"We know from experience that price rises will not reduce the amount of fuel used so the carbon dividend will be zero. It will, however, mean that more of our fuel will be bought in the North, greatly diminishing its effectiveness as a revenue raising measure."
Environment lobby group Friends of the Earth welcomed the tax, but said big polluters such as the ESB and heavy industry should not have been exempted.
These companies are part of the Emissions Trading Scheme (ETS), where they buy permits which allow them to pollute.
Director Oisin Coughlan said the tax fell "far short" of what was needed to reflect the damage carbon dioxide did to the environment.
Change
"Putting a price on carbon is an important step in the fight against climate change," he said. "€15 a tonne is far lower than is necessary to drive the transition to a low-carbon future. The tax will need to increase year-on-year."
But the Irish Rural Link (IRL) said the tax would hit the poorest living outside urban areas because they would spend more on transport fuel.
"We are disappointed the income from the carbon tax will not be ringfenced for measures to alleviate fuel poverty and the hardship rural families face," chief executive Seamus Boland said.
- Paul Melia
Irish Independent
