Wednesday 21 February 2018

Motorists to fork out €3bn in fuel taxes this year

Aideen Sheehan Consumer Correspondent

HARD-PRESSED motorists have handed over €521m in tax on petrol and diesel to the Government already this year.

The Exchequer has emerged as the big winner from rocketing fuel prices as the tax take from petrol and diesel soared by €45m in the first two months of the year, new figures obtained by the Irish Independent reveal.

And that's even before the price hikes of the last week when prices at the pumps rose to over €1.53 at some filling stations.

If prices stay at these record levels, drivers will pay the Government close to €3bn this year simply to stay on the road.

Department of Finance figures reveal drivers paid €396m in excise on petrol and diesel in January and February, €23.5m in carbon tax and €101.4m in VAT.

The Government's total tax of €521m from fuel in just two months compares with €476.5m in the same period last year, a rise of almost 10pc.

That is partly down to higher excise rates introduced in the last Budget, but is mainly a result of soaring world prices, which deliver the Government a much higher VAT return.

Calls from consumer groups, petrol retailers and hauliers to reduce the rates show few signs of succeeding, as fuel tax remains the only area where exchequer revenues are healthy.

The Department of Finance said there were no plans to reduce excise rates on fuel, unlike perhaps in Britain, where parliament will debate the issue next week. "While taxation measures do contribute to petrol prices, the current spike in oil prices is the result of international events, largely the uncertainty about Libya," the department said in a statement.

At current prices, the average family is paying €225 a month to fill up their car.

If these levels are maintained, the annual petrol bill will soar to €2,700 at a time when incomes are squeezed, taxes are up and further interest rate hikes are looming.

Unless there is a change, the family petrol bill for 2011 will cost €400 more than last year, when prices averaged around €1.28 per litre. The figures are based on AA analysis of the costs of the average family car doing 12,000 miles a year.

Prices yesterday remained stubbornly high at over €1.50 and reaching €1.53 in some stations, while diesel was around €1.46 on average.

The price of Brent Crude Oil fell slightly yesterday but was still trading at over US$114 (€82) a barrel as ongoing fighting in Libya and concerns about unrest spreading into Saudi Arabia kept markets nervous.

In Northern Ireland yesterday diesel prices were far outstripping petrol, with the average price of a litre of petrol costing £1.316 (€1.53) compared to £1.373 (€1.60) for diesel.

Irish Independent

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