Ireland Tops Fuel Price Chart: Taxes and Carbon Costs Soar

Ireland Tops Fuel Price Rankings

“The carbon tax increase will catapult Ireland to the highest diesel prices in Europe...”

Ireland's fuel prices skyrocket as carbon tax hikes loom, surpassing Finland as Europe's most expensive. Discover how border county retailers are impacted and what experts forecast for the future.

Ireland is set to become the most expensive country in Europe for fuel due to the government's decision to revert fuel taxes to pre-inflation and pre-interest rate surge levels. This move is expected to lead to higher petrol and diesel prices, primarily driven by an automatic increase in carbon taxes outlined in the national budget.

The organization representing Irish fuel importers and retailers, Fuels for Ireland (FFI), has expressed concerns over this development. Kevin McPartlan, FFI's CEO, warns that the planned carbon tax hike will catapult Ireland to the top of the European Union's fuel price rankings, making it the priciest country for fuel.

This change is likely to impact households and businesses, already struggling with energy costs. For context, Ireland's energy statistics show significant price fluctuations in electricity and gas for both households and businesses. The average electricity price to households in Ireland has seen notable increases, with a recent peak of 37.48 Euro cents/kWh in the second semester of 2023. Similarly, gas prices have also experienced volatility.

Ireland to become Europe's priciest for fuel.

“The carbon tax increase will catapult Ireland to the highest diesel prices in Europe, and among the highest for petrol. We've consistently called on the government to review fuel taxation. The relentless rise in fuel prices is not just unsustainable but counterproductive,” McPartlan said.

“Our recent survey shows that 80 percent of motorists agree with the need for an urgent review.”

Kevin McPartlan stressed that Ireland's current taxation policies are falling short of their environmental objectives, especially when it comes to encouraging the adoption of electric vehicles (EVs). In essence, the existing tax framework isn't providing sufficient incentives for people to make the switch to EVs, which is crucial for reducing carbon emissions.

To accelerate EV adoption, experts suggest that the government should reconsider the taxation policies and introduce measures such as reducing or removing VAT on EVs, implementing salary sacrifice schemes, and providing plug-in car grants. These incentives have proven successful in other countries, like Norway, where 80% of vehicles sold in 2022 were EVs.

Challenges to EV Adoption:

High Upfront Costs: EVs are often pricier than traditional internal combustion engine vehicles

Charging Infrastructure: Limited accessibility and reliability of charging points

Range Anxiety: Concerns about running out of charge before reaching a charging station

Lack of Education: Insufficient awareness about EV benefits and capabilities

Potential Solutions:

Smart Charging Infrastructure: Implementing intelligent charging systems that optimize energy usage

Community Charging Schemes: Encouraging shared charging facilities in neighborhoods

Public Education Campaigns: Raising awareness about EV benefits and addressing range anxiety concerns

By addressing these challenges and implementing effective solutions, Ireland can revamp its taxation policies to better support the transition to electric vehicles and achieve its environmental goals.

These measures disproportionately affect vulnerable populations, particularly those with limited financial resources.

Jennifer Kilduff, Head of Marketing & PR at AA Ireland, said, “This September has been a good month for motorists. Fuel prices have decreased, likely due to falling crude oil prices, and further reductions in electricity costs for EV owners are expected. Hopefully, these gains won't be undone by any upcoming budget measures.”

Ireland is poised to surpass Finland as the most expensive country for fuel due to impending carbon tax hikes. However, contrary to forecasts, AA Ireland's latest data reveals a downward trend in fuel prices.

In the past month, petrol prices dropped 7 cents to €1.74/litre, while diesel decreased by 7 cents to €1.67/litre. This decline mirrors the slump in crude oil prices, now at $72/barrel.

The shift to electric vehicles becomes more appealing as costs decrease. AA Ireland reports a €58 reduction in annual running costs for EVs, making them an increasingly viable option for budget-conscious drivers.

Jennifer Kilduff, Head of Marketing & PR at AA Ireland, said, “This September has been a good month for motorists. Fuel prices have decreased, likely due to falling crude oil prices, and further reductions in electricity costs for EV owners are expected. Hopefully, these gains won't be undone by any upcoming budget measures.”

Ireland's impending carbon tax hike is a pressing concern, as it would catapult the country to having some of the highest fuel taxes in Europe. The proposed increase would push petrol taxes to 57.2% and diesel taxes to 54%, with the latter matching Malta's highest rate in the EU. This significant tax burden is expected to have far-reaching implications for Irish citizens and businesses.

To put this into perspective, Ireland's fuel taxes would surpass those of other European countries, including Finland, which currently has a diesel tax rate of 51%. The Netherlands holds the top spot for highest gas tax in the EU, at €0.81 per liter.

European Fuel Tax Rankings:

• Netherlands: Highest gas tax, at €0.81 per liter 
• Finland: Diesel tax rate of 51% 
• Ireland (proposed): 57.2% petrol tax and 54% diesel tax 

These tax increases are likely to impact various sectors, including transportation and logistics, and may have a ripple effect on the broader economy.

The Irish fuel market faces additional pressure due to significantly lower fuel prices in Northern Ireland, where petrol costs as little as €1.51/litre (sterling equivalent), potentially impacting retailers in Ireland's border counties.