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No plans for fuel tax cuts to help struggling motorists

The Department of Finance has said the price of petrol and diesel is outside of the Government’s control.
Aug 23rd 2012, 10:14 AM 4,118 59

IRELAND HAS NO plans to follow France in its decision to cut tax on oil products in order to lower fuel costs and provide a temporary reprieve to struggling motorists.

A spokesperson for the Department of Finance told that temporary tax changes will not be introduced to counteract the increase in fuel prices “as this would lead to a significant loss to the Exchequer”.

“Tax receipts from VAT, as with all receipts, are used to pay for vital public services such as health, education and social protection.”

French President Francois Hollande said the tax cut will be modest and temporary as the government seeks a more permanent solution for price regulation, reported Bloomberg. He wants to ease the pressure on consumers, providing them with extra cash in their pockets with an aim to reinvigorate the economy.

The Irish government has acknowledged the significant financial burden being posed by high fuel costs on families but said that the increase in the price of petrol is largely due to external factors, including exchange rates, as well as production and refining costs, and therefore outside of its control.

The spokesperson continued, “Indeed, Ireland, as with other countries, has experienced a significant increase in the cost of petrol and auto-diesel in recent years. The increase in fuel prices is an international phenomenon.”

The average price of auto-diesel in 2010 was €1.23 per litre. During this period increases in excise in Budget 2011 and in carbon tax in Budget 2012 raised excise on auto-diesel by just over 3.5 cents per litre (VAT inclusive).

According to, this week’s average petrol price is about €1.63 but AA Ireland has warned that over the next week, prices could hit a record €1.70 per litre.

Speaking to RTÉ’s Morning Ireland this morning, Green Party leader Eamon Ryan said that although the idea would be popular with the public, there are better and more “clever” ways of tackling the issue.

He suggested putting any additional funds into the public transport system and the retro-fitting industry or ceasing VRT increases to encourage the use and purchase of more efficient vehicles.

Related: Prepare for a hike in petrol prices, warns AA Ireland>

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Sinead O'Carroll


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