Motorists face a rise in fuel prices from midnight tonight, with four cents added to a litre of petrol and two cents to a litre of diesel, pushing prices to an average of €1.40 per litre of petrol and diesel to €1.32 per litre.
According to the Automobile Association (AA) the rise in the price of petrol represents a record high. “Previously the record high price paid for petrol was during the oil price surge in the summer of 2008 when prices peaked at €133.5,” it said in a statement.
Topaz chief executive Eddie O’Brien said the sheer amount of tax the Government levies on fuel in this country is very high, “especially given the total dependence of the domestic economy on road transport”.
“Even before today’s announcement 60 per cent of the price of a litre of petrol was going directly to the Exchequer. That will increase further following today’s announcement. This tax on transport has a direct impact on the broader economy and through that on economic activity.”
For commercial vehicle buyers, the Vehicle Registration Tax (VRT) was increased from the current flat rate of €50 to €200 from May 1st next year.
These were the direct increases in motoring costs in a Budget that also extended the current car scrappage scheme until July next year and continued the tax rebates of up to €1,500 on hybrid and flexifuel cars for a further two years until 2012. These were due to end on December 31st.
Under the extended scrappage scheme programme, owners of car registered before July 1st, 2001 will receive up to €1,250 off the VRT if they purchase a new car with emissions of less than 141g/km. The allowance, however, has been reduced from the current relief of €1,500.
The extension will come as a relief to the motor sector, which has benefited from the introduction of the scheme in January. According to the Society of the Irish Motor Industry (SIMI) 16,468 new cars have been sold under the scheme between January 1st and the end of November. New car sales up to the end of November were 87,988, up 54 per cent on the same 11 month period last year.
Welcoming the extension, SIMI director general Alan Nolan said the Government tax income on new car sales under the scheme so far this year has been €57.6 million. SIMI estimates that if 10,000 cars are sold under the scheme in the first six months of next year, this will net the Government between €35 million and €40 million.
Motor tax rates have been left unchanged, although the Government’s four-year National Recovery Plan states an intention to adjust the CO2-based tax band for cars by 2013. This is likely to involve changes not only to the bands but will also impact on VRT rates on new cars.
