| 5.1°C Dublin

Motorists face fuel and car tax hikes

MOTORISTS are to be hit hard in the pocket with increases in petrol prices and car tax.

The cost of fuel is expected to rise even further in December when the carbon tax goes from €15 a tonne to €25.

Petrol prices have been climbing steadily for months. A number of service stations in the capital are charging almost €1.54 a litre -- with one station almost charging €1.60.

Another 2pc hike can be expected at the end of the year as part of green policies.

Oil companies have linked petrol price increases to the volatile situation in Libya and the threat of unrest in Saudi Arabia, which has fuelled speculation on world oil prices.

Website pumps.ie has put average petrol prices at 152.9c, while diesel is at 147.9c.

The AA's monthly fuel price survey earlier this month showed the countrywide average price of a litre of unleaded petrol was up 1.3c on the figure for March, while diesel also rose by 1.3c.

The upward trend has been hitting motorists since November of last year.

The figures showed the average car owner was paying €226 for fuel in a month, 57pc of which is tax. That figure was €30 higher than it was last October.

In addition, a review of the motor tax regime is expected to result in a new band for the most efficient cars.

Under the changes, motorists would be charged on the basis of how much carbon dioxide their cars emit, instead of the current system of charges based on engine size.

It follows a similar system introduced for new cars in January 2009 rewarding the owners of less-polluting vehicles.

The Department of Finance has committed to reviewing and adjusting bands before 2013.

However, it is believed the changes could be made as soon as December's Budget.

Figures also show that as many as 120,000 motorists never pay any road tax, while a similar number again falsely claim their car has been off the road for months.

The money lost to the Exchequer is now €80m a year.