Ireland will be the European country with the most heavily taxed fuel come October, according to Fuels For Ireland (FFI), the lobbying group representing fuel importers and retailers.
How high are fuel taxes going?
According to FFI, following the fuel duty price increases in August (the last of the increases to balance the cuts in fuel excise duty made in the wake of Covid) and the automatic carbon tax increases due in Budget 2025 in October, Ireland’s total tax level on petrol will be 57.2 per cent - the third highest overall - and on diesel will be 54 per cent - joint highest with Malta.
FFI quotes the latest data from Fuels Europe, which ranks Ireland third highest overall for diesel taxation and seventh highest for petrol tax. However, those rankings don’t take into account the excise duty rises in April and August or the upcoming carbon tax increase.
Cyprus has the lowest fuel taxes in Europe at the moment, with petrol taxed at 43 per cent and diesel at just 39 per cent.
Who’s being hit hardest?
FFI says that these rises and the higher taxes they bring affect all consumers and traders, but disproportionally those who live in border counties. Petrol and diesel prices in Northern Ireland remain significantly cheaper - around €1.56 for petrol and €1.64 for diesel at current exchange rates.
Because of this, the FFI is calling, not for the first time, for: “The establishment of an Expert Group on Taxation. This group would bring together a diverse range of stakeholders - including government departments, the Revenue Commissioners, economists, environmental specialists, and fuels industry representatives - to develop a balanced fiscal strategy. This collaborative approach aims to ensure that energy policies support both the transition to sustainable energy and the affordability of fuel, while safeguarding state revenue.”
What does the fuel industry think?
Kevin McPartlan, CEO of Fuels for Ireland, stated, “With the upcoming budget poised to introduce further tax hikes, we need to address the significant impact these changes will have. The forecasted increases with the recent excise duty and the upcoming carbon tax will propel Ireland to the top of the EU fuel taxation rankings, placing an unprecedented financial burden on both consumers and businesses. This escalation will exacerbate the already challenging conditions for businesses, particularly in border regions, and significantly increase costs for consumers. Immediate action is required from the government to establish an expert group on taxation to develop a well-balanced fiscal policy that addresses these pressing issues and alleviates the economic strain on all stakeholders.”