Price hikes for petrol and diesel, waste disposal and hospitality come into force today

Three price increases took effect from midnight, with an end to reduced taxes on motor fuel and hospitality coinciding with extra charges for unrecycled household waste.

The excise duty on a litre of petrol and diesel will climb by 7c and 5c respectively from Friday as a measure introduced last year to help consumers during the cost of living crisis nears to an end.

Minister for Finance Michael McGrath on Tuesday said this increase was “locked in” but that a final planned increase to the tax, which would bring it back to its original level from the end of October, would be kept under review as the Government prepares the budget package. This would add 6 cent a litre to the price of diesel and 8 cent for petrol.

The average cost of motor fuel stands at around €1.70 a litre at present, meaning it could soon cross the €2 barrier again.

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The reduced 9 per cent VAT rate for tourism, hospitality and some other services - including hairdressing - expired at midnight on Thursday and returned to 13.5 per cent. Last week Ibec called for it to be maintained, warning of financial pressure on firms, however, the Government extended the lower rate for the final time in February.

Speaking ahead of the midnight change, Vintners Federation of Ireland (VFI) president John Clendennen said: “Increasing VAT to 13.5 per cent will negatively impact the trade as the summer season ends and a quieter autumn trading period arrives. Customers are already feeling the pinch with cost of living increases so this is a short-sighted move by government that will lead to concerns about long-term viability.”

Also on Friday, a new levy on customers takes effect under the Waste Management (Landfill Levy) (Amendment) Regulations 2023 and the Circular Economy (Waste Recovery Levy) Regulations 2023, which introduces a waste recovery levy of €10 per tonne (or 1,000kg), and a €10 increase to the existing “landfill levy” to €85 per tonne.

Refuse collection providers will increase their prices to offset the impact on their business of the levy, which aims to encourage recycling and reduce the amount of waste that goes to landfill.

[ Fuel prices could cross €2 a litre again in winter, AA Ireland warns ]

In an email to customers this week, Panda said there would be a charge of €0.01 per kg of general waste collected from customers homes. This levy will be subject to VAT at a rate of 13.5 per cent, which would be referenced and calculated as a separate line item on any invoice related to general waste.

As the levies apply only to “black” bin waste, householders can manage the impact of this charge by sorting their waste and reusing and recycling as much as possible to minimise their overall household waste charges.

“Please seize this opportunity to increase your segregation from general waste to your recycling and compost bins as much as possible,” the company wrote.

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Last month, Thornton’s also announced an increase in their charges, blaming the levy “in addition to other inflationary costs”.

The Irish Waste Management Association said the levy will not be successful in changing behaviour unless it is accompanied by a strong public awareness campaign.

The organisation, which represents private sector waste collectors, said it supports the aims of the move but that it may not be simple for householders to achieve lower costs, with much depending on price plans and how the increase is applied.

It said “Ireland is not on track” to meet a EU target of 55 per cent recycling of municipal wastes by 2025 and, if progress is to be made, all State waste agencies need to make a better effort.

Conor Walsh of environmental firm SLR Consulting said for a household that might generate about 700,000-800,000 kg of waste a year the VAT inclusive cost would only be in the region of €10 annually if passed on by waste collectors.

In some cases, he said, a household may remain in the same price band and there would be no effect on them at all, but in others collectors might increase per kilo weights at the annual renewal date or immediately.

Mr Walsh added that currently it is illegal in urban areas to place food waste in residual bins. “Few householders realise this fact and it points again to the need for a concerted public awareness campaign driven by Government.”