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Budget 2020: Petrol and diesel prices to be hiked tonight Paschal Donohoe denies €6 carbon tax increase is a 'cash grab'

  • Petrol and diesel will cost more from midnight tonight
  • Widely anticipated €6 increase in the carbon tax takes effect
  • Increase will also apply to home heating fuels but not until May next year
  • Government says the extra €90m in revenue will be ringfenced for climate action measures
  • 'There might be a mild rush to the pump but because the increases are only 2 cent per litre, they're unwelcome but they won't cause a panic' - AA Roadwatch's Conor Faughnan

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Minister for Finance Paschal Donohoe arrives at his department ahead of delivering Budget 2020. Picture: Gerry Mooney

Minister for Finance Paschal Donohoe arrives at his department ahead of delivering Budget 2020. Picture: Gerry Mooney

Minister for Finance Paschal Donohoe arrives at his department ahead of delivering Budget 2020. Picture: Gerry Mooney

PETROL and diesel will cost more from midnight tonight as the widely anticipated €6 increase in the carbon tax takes effect.

The increase – the first of ten planned annual increases - will add about two cents to a litre, which amounts to an additional €1 for every 50 litre fill.

The increase will also apply to home heating fuels but not until May next year when winter has passed.

The measure will bring in an extra €90m in revenue in 2020 which is to be ringfenced for climate action measures.

Almost one third of it will go to assist communities in the midlands affected by the winding down of peat industries by Bord na Mona and ESB.

A €20m fund will be spent on energy efficiency installations in social housing in the area, €5m on peatland rehabilitation and €6m on a new Just Transition Fund.

Those measures are expected to support at least 400 new sustainable jobs in the region.

The way in which vehicle emissions are taxed is also changed. The 1pc diesel surcharge introduced on VRT last year is being replaced by a nitrogen oxide tax that will be applied to all new cars and used imports from January.

Next year’s transport budget is being increased by €384m to allow for additional investment in public transport including the rural transport scheme, green ways and urban cycle routes.

Funding is to be provided to double the number of local authority electric car charging points and to support the installation of communal charge points at apartment blocks, taxi ranks and other transport hubs.

 

Grants for the purchase of electric vehicles are being maintained.

Speaking to Independent.ie, the AA Roadwatch Consumer Affairs Director Conor Faughnan said that he feels that because the increases in fuel are so low, they are merely a quick way to make money by the government.

"Fuel increases are a cash grab and not a carbon measure because they will not sway the consumer to make better choices.

"We support and welcome measures in this year's budget which will reduce the carbon footprint, like measures which make it more difficult to buy a second hand diesel vehicle from the UK," he explained.

"But increasing the cost of living will not nudge the customer to make better choices," Mr Faughnan added.

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AA consumer affairs director Conor Faughnan. Photo: Damien Eagers

AA consumer affairs director Conor Faughnan. Photo: Damien Eagers

AA consumer affairs director Conor Faughnan. Photo: Damien Eagers

 

Mr Faughnan added that he does not expect extended delays tonight by motorists looking to fill up their tanks before midnight in an effort to save money before the increases kick in after 12am.

"There might be a mild rush to the pump but because the increases are only 2 cent per litre, they're unwelcome but they won't cause a panic," he said.

"We saw a big rush to the pump after the emergency budget was announced in 2008 after the crash, where the excise duty went up by 8 cent per litre, but we won't see anything similar tonight."

 

He added that as fuel costs fluctuate naturally, motorists will not be too swayed by the fuel increases.

"Petrol and diesel costs naturally fluctuate and the government knows that, rising prices by 2 cent is just a PR spin and a quick way to make money."

He said that the price hikes will not influence buyers to switch to an electric vehicle, but other incentives might.

"What would encourage a buyer to switch from a diesel car to an electric vehicle are incentives like diesel scrappage schemes if buying an EV - but bringing up the cost of living is not going to make a difference," he added.

However, speaking at a press conference in Government Buildings this evening, Mr Donohoe said that "every cent" of new money raised in carbon taxation increases will be going back into measures that tackle climate action and rejected suggestions it amounts to a 'cash grab'.

Online Editors


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