Government ‘profiteering’ at motorists’ expense

SURGING oil prices are allowing the Government to “profiteer” at the expense of hard-pressed drivers, it was claimed last night.

Motorists’ groups demanded the exchequer hand back some of the €2.2 billion it rakes in from the forecourt pumps every year.

With petrol rocketing in price by 28% since 2004 and diesel soaring by 45% in the same period, the Government’s tax take is burgeoning.

VAT take on petrol spiralled by 13.5% from €119m to €135m in the first three months of this year, estimated Department of Finance figures show, while excise levies on the fuel stood at €291m for the same period.

Diesel VAT profits climbed 17.6% in the first quarter of 2008 to stand at €17m, while the excise take hit €293m.

The Government scoops 44.2 cent in excise duty per litre regardless of price, but profits from cost increases in its VAT yield.

Labour demanded the extra windfall be ring-fenced and used to ease the threat of “fuel poverty” hanging over families facing rising prices.

The AA echoed calls for the Government to give drivers a break. AA public affairs manager Connor Faughnan said: “It is profiteering to the extent that they always have been raking in a fortune from the motorist.

“They take an enormous chunk of money at the pumps and it is time they devised a way of handing some of it back,” he said.

The Government is bound by EU rules on VAT, but could cut the excise levy, the AA suggested.

Labour energy spokesperson Liz McManus called on the Government to take urgent action to alleviate the financial pressure on households due to soaring prices.

“The increase in the cost of diesel in particular has created massive problems for the fishing and haulage sectors.

“It has made the transport of goods much more expensive and this is likely to add to the cost of many products, thus fuelling inflation even further.

“The windfall the Government is taking in through increased taxation arising from the escalating cost of fuel should be ear-marked for measures to ameliorate the impact of rising fuel prices as the Government will take in almost €1bn in taxes and excise duties in fuel in the first four months of this year alone,” she said.

The Department of Finance said Irish motorists were in a better position than most in the EU.

“We are below the average for fuel prices in the EU, even when you just take the former 15 member EU,” a spokesperson said.


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