IRELAND IS NOW among the most expensive countries in the European Union to fill up a car with petrol or diesel once taxes and levies are applied — despite the underlying cost of fuel being broadly average by European standards.

New analysis of European Commission data by DoneDeal Cars shows that Ireland ranked 5th most expensive in the EU for petrol and 3rd most expensive for diesel when pump prices including all taxes were compared across Member States in early 2026.

However, when the same prices are examined before tax, Ireland drops sharply down the rankings — to 13th for petrol and 8th for diesel — placing it close to the middle of the EU range. The figures underline that it is taxation, rather than the base cost of fuel, that is driving Ireland’s high prices at the pump.

The analysis is based on data from the European Commission’s Weekly Oil Bulletin for the week of 5 January 2026, which provides harmonised fuel price comparisons across all 27 EU Member States.

Layered taxes push Ireland up the rankings

Ireland’s sharp shift in price ranking before and after tax reflects the cumulative impact of multiple charges applied to fuel. Motorists pay a fixed excise duty per litre, a separate carbon tax that increases annually, and costs associated with the Renewable Transport Fuel Obligation, which requires biofuels to be blended into petrol and diesel.

In addition, there is the NORA levy, which funds national oil reserves, and the Better Energy levy linked to energy efficiency schemes. VAT at 23% is then applied to the full amount, meaning motorists effectively pay VAT on top of existing taxes and levies.

Taken together, these measures mean that more than half of the final pump price of petrol and diesel in Ireland is accounted for by taxation and mandatory charges, rather than the underlying cost of fuel itself. While fuel taxation is common across the EU, Ireland stands out for both the number of separate levies applied and the compounding effect of VAT on top of them.

Reality for Irish motorists

This comes at a time when Irish drivers remain heavily reliant on petrol and diesel. Data from DoneDeal Cars shows that in 2025 almost 70% of fuel-type searches were for petrol or diesel vehicles, highlighting the continued dominance of internal combustion engines in consumer demand.

Interest in electric and hybrid vehicles continues to grow, but they remain secondary in overall buyer behaviour. Electric vehicles accounted for just under 19% of new car sales in 2025, meaning the vast majority of vehicles entering the market — and feeding into the used car parc — will continue to require petrol or diesel for many years.

Related Reads

Motoring: You're right, cars ARE way more expensive than they used to be

Motoring: When it comes to cars, we are often guilty of buying more than we need

Opinion: Irish drivers may need to start thinking differently about electric vehicles

As a result, fuel pricing policy continues to have a disproportionate impact on everyday motoring costs. With private car use still essential for work, family life and daily travel across much of the country, Ireland’s approach to fuel taxation increasingly stands out when viewed against both EU comparisons and domestic consumer behaviour.

The data highlights a widening gap between policy ambition and on-the-ground reality. Petrol and diesel remain the fuels most Irish motorists rely on, yet Ireland applies some of the highest overall fuel charges in the EU once taxes and levies are taken into account — despite not having unusually high fuel prices before tax. 

Paddy Comyn is the Head of Automotive Content and Communications with DoneDeal Cars. He has been involved in the Irish Motor Industry for more than 25 years.

Note: Journal Media Ltd has shareholders in common with Done Deal Ltd