Hundreds of millions of euro will go to the Government at the expense of hard-pressed motorists as prices at the pumps are set to rise again.
The staggered phasing out of excise duty on petrol and diesel announced by Government last month will see the price of a tank of petrol rise by €10, as €700 million is set to land in the coffers of the State.
The Irish Independent reported that Finance Minister Michael McGrath said this is comprised of additional excise duty of €478m for a year, higher VAT on diesel of €35m, €159m extra and higher VAT on petrol of €35m.
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Cuts to excise duty led to a reduction of 15c on a litre of diesel and 20c on a litre of petrol, which was introduced by Government last year.
Excise is a duty that is added to the sale of mineral oils, cigarettes and alcohol. It is a fixed amount which is charged per litre and hence does not change as the price fluctuates.
However, following February's cost-of-living emergency measures meeting between cabinet, it was announced that this would be phased out this year, from June 1.
Petrol is set to rise by 6c and diesel by 5c, while on September 1, petrol will rise by 7c and diesel will go up by 5c, with the final increase taking place on October 31, seeing petrol rise by 8c and diesel by 6c.
The AA has listed March prices at the pumps in Ireland as 165c for petrol and 166c for diesel. The prices before taxes are added are 84c and 91c for petrol and diesel, respectively.
Excise duty at the moment sees 37c added to petrol and 30c added to diesel, while National Oil Reserves Agency (NORA) levy, a tax added so that there are 90 days worth of oil stock in case of a shortage, adds 2c to each and VAT at 23% sees 30c and 31c added.
Fuels For Ireland chief Kevin McPartlan backed the gradual price increase and said doing it this way will avoid potential chaos.
He stated: “I think it’s really important that we don’t have any particular day where fuel goes up very dramatically.
“All that will do is create a spike in demand as we approach that period of time, which makes managing of stocks really really difficult."
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