THE GOVERNMENT has been urged to cut fuel taxes after new figures show petrol and diesel prices have reached record highs.
According to data released by motoring lobby group AA Ireland yesterday, the average price of a litre of petrol is 130.5 cent, up by 6.6 cent since the last survey in May and up more than 10 cent a litre since April.
Diesel is rising at an even faster rate than petrol, with the average price of a litre of diesel now at 142.9 cent. This is a rise of 10.5 cent since May and an increase of more than 18 cent a litre since figures were released in April by AA Ireland. Since October 2007, the price of petrol has gone up by 13 per cent, while the price of diesel has risen by a staggering 30 per cent in six months.
The data prompted the Consumers’ Association of Ireland to call on the Government to cut tax on fuel. The group’s chief executive Dermott Jewell said such a cut could be introduced “even in the short- to medium-term on an interim basis in some sectors.” He admitted that the Government had “thrown out the idea on every previous occasion but these prices are extraordinary”.
“Consumers are already having a difficulty in affordability across the board,” he added. If action is not taken the Government may be presented with a “very stark inflation figure in months to come” . He also said consumers should “take a degree of control themselves” by cutting down in consumption where possible.
The rising cost of fuel, particularly diesel, has sparked port blockades by fishermen and threats of protest action by hauliers who have sought a meeting with Minister for Transport Noel Dempsey.
The situation is not unique to Ireland. French fishermen recently battled riot police in Brussels in a protest over high fuel prices and in South Korea about 14,000 truckers walked off the job last Friday after talks on higher pay and demands for cheaper diesel broke down.
The high cost of diesel coincides in Ireland with new vehicle tax changes that come into effect from July 1st. VRT and road tax will be based on a vehicle’s carbon emissions rather than its engine size. More fuel-efficient cars, particularly diesel models, will see a fall in price, while large, petrol-engined vehicles are likely to rise in price.
Diesel cars represent 27 per cent of overall sales, but these are expected to be closer to 50 per cent by 2009, when the full effect of the new tax regime will be seen. Larger petrol engines are likely to suffer under the new regime.
AA public affairs manager Conor Faughnan said yesterday that the high prices had affected “ordinary motorists and the haulage sector very severely”.
“Diesel has hit prices that were not even dreamt of a year ago,” said Mr Faughnan. “Rising oil prices may be unpleasant, but at least we can understand what’s happening.”
“What is not clear is why diesel is being hit so much harder than petrol. This is not specific to Ireland, it is happening right across the globe.” In Ireland there is slightly less tax on diesel than on petrol, suggesting it should be marginally cheaper than petrol. The two fuels usually cost about the same in December, with petrol about 6 or 7 cent more expensive in the summer. This pattern has not been seen this year.
Mr Faughnan said the high price of fuel was having “far- reaching effects” on the Irish economy. He said that 96 per cent of all freight is moved by road, and there is an oil-price component in practically every good and service.
