Tuesday 12 December 2017

€650 jump in bill for family car

Annual running costs hit €11,817 as fuel price rises spark plea for excise cut

Mark Hilliard

THE cost of running a small family car surged by €650 in the last year. The Automobile Association (AA) annual survey of motoring costs shows the price of maintaining a car has risen 5.8pc.

It now stands at just under €1,000 a month, with big fuel price increases coming on top of insurance and maintenance cost increases.

The Government was last night urged to reduce excise rates on fuel in a bid to lower the petrol prices which have now reached €1.52 per litre in many areas.

The Consumers' Association of Ireland (CAI) said the rising cost would hit other areas of spending and called on the Government to lower tax rates.

The AA calculations are based on running costs, servicing, fuel and insurance for a small family car in the 'Band C' tax category, typical engine size of 1251 - 1500cc.

It now costs €11,817 a year-- with fuel rising from €2,000 in 2010 to €2,301 this year.

"Of course, the single biggest change is the cost of fuel," said Conor Faughnan of the AA.

"In June of 2010 petrol cost 133.3 cent per litre but by June of this year that had risen to 151.7 cent. This is a surge of more than 12pc."

Although the AA and the CAI have said that excise rates should be reviewed, a government source said that this was unlikely to happen.

"Two thirds of the price of fuel is tax and most of this money is going to the Government," said Mr Faughnan.

"If it wasn't for tax increases we would now be looking at retail prices of about 132c whereas now we are looking at about 150c."

Excise rates here are 57.6 cent on a litre of petrol and 46.6 cent on diesel.

The significant increase in the cost of running a car will be a further blow to families who are struggling to keep up with a rising cost of living.

Last month the Commission for Energy Regulation sanctioned a 22pc increase in gas prices which will lead to an average annual hike of €160 from October.

Just before that, Bord Gais Energy announced a rise in the price of its electricity by 12pc, or an increase of €144 to average bills.

While oil prices are now expected to fall in line with the global economic crisis, economists remain concerned about the impact on consumers.

"The Irish consumer has been under the cosh for the last three years for a number of reasons: increased taxes, cuts in government expenditure," said Friends First economist Jim Power.

"A whole lot of factors have undermined consumer confidence. If they (the cost of essentials) continue to rise it takes money out of pockets and undermines confidence and spending."

Dermott Jewell of the CAI said that if motorists were forced to spend increasing amounts of money on running their vehicles, other areas might feel the brunt.

"Something has to give. If they need their car they may take a risk elsewhere; they may stop paying their health insurance or start to delay in other areas like paying their road tax."

Irish Independent

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