Fuel prices fall unexpectedly but fears remain over upcoming carbon tax hikes 

After the planned carbon tax increase next month, Ireland is expected to rise from 2nd to 1st place for diesel prices in Europe, Fuels for Ireland has said

After the planned carbon tax increase next month, Ireland is expected to rise from 2nd to 1st place for diesel prices in Europe, Fuels for Ireland warned.

The price of petrol and diesel fell by an average of 7c per litre in September, defying expectations that the reinstatement of excise duty last month would further spike fuel prices. 

Latest figures from AA Ireland found that petrol dropped to €1.74 per litre, while diesel fell to an average of €1.67 as crude oil prices continued to decrease, now costing $72 per barrel.

Electric vehicle owners also saved money, with AA expecting an average payment of €857.77 per year to cover the national average of 17,000 km per year, marking a reduction of €58 per year in September. 

“It’s a good month for all motorists this September," said Jennifer Kilduff, Head of Marketing & PR for AA Ireland. 

"Petrol and Diesel prices on average have decreased this month, perhaps as a result of crude oil prices falling." 

"The EV driver is also winning this month with the average monthly charging costs reducing," Ms Kilduff said, adding that further reductions are expected from November 1 with Electric Ireland announcing they will be cutting some of their rates. 

"Hopefully, these small wins will not be offset by any budget measures.”

However, lobby group Fuels for Ireland has warned that Ireland could become the most expensive country in Europe for diesel and among the highest in petrol due to escalating fuel taxes coming in on Budget Day.

"The imminent increase in carbon tax will push Ireland to the top of the European fuel price rankings, exacerbating an already high cost of living for Irish consumers," the group warned, citing new research revealing "overwhelming" public concern.

"The relentless surge in fuel prices is causing widespread frustration and financial strain, and the public is increasingly desperate for the government to review its punitive policies," it said.

According to the EU’s Weekly Oil Bulletin published by the European Commission, Ireland's current diesel price is €1,667.20 per 1,000 litres, which is above the Euro Area average of €1,554.61 per 1,000 litres. 

Fiscal pressure

After the planned carbon tax increase next month, Ireland is expected to rise from 2nd to 1st place for diesel prices in Europe, Fuels for Ireland warned.

"For many years, we’ve urged the Government to take meaningful steps by establishing an expert group to review fuel taxation. The relentless rise in fuel prices is not just unsustainable for consumers but counterproductive," said group CEO, Kevin McPartlan.

"It's clear that current taxation policies are not driving the shift to electric vehicles, as originally intended. Instead, they disproportionately burden those who can least afford it. 

"The Government must understand that this is not about pro-environmental policy—it’s about fiscal pressure. Without adequate support for consumers and a balanced approach to taxation, we risk pushing more people into financial hardship.”