Motorists up in arms as car fuel hits all-time high

MOTORISTS have hit out at the latest increases in the cost of motor fuel which, they claim, have pushed the cost of petrol and diesel to all-time record levels.

Vehicle owners were hit with an immediate increase in running costs as Finance Minister Brian Lenihan announced an overnight rise in the cost of motor fuel with petrol up four cent per litre and diesel by two cent per litre.

The measure, which was widely anticipated, is expected to raise an additional €106m for the Government in 2011.

The Automobile Association has estimated that the increases in excise on motor fuel will add €6 on average to a motorist’s monthly fuel bill.

The AA said the latest increases meant the average cost of petrol is €1.40 per litre compared with the previous surge in oil prices in the summer of 2008 when they peaked at almost €1.34 per litre.

“That record will now be broken not because of oil prices, but because of tax increases,” said AA spokesperson Conor Faughnan who expressed disappointment at the budget decision. “It is worth noting that, were it not for the tax increases of the last two years, petrol would cost approximately €1.21 per litre.”

He accused the Government of treating motorists as a cash cow whenever it was short of money.

“These price hikes mean a genuine increase in hardship for almost every family in Ireland. They come on top of continuing high motor insurance costs,” said Mr Faughnan.

The AA said it was already aware that rising motoring bills were already putting many family budgets under strain.

The rising cost of petrol and diesel comes against a background of a slow increase in the cost of motor fuel on international markets in recent weeks. It also follows increases of between four and five cent per litre in both petrol and diesel in last year’s budget as part of the Government’s carbon tax.

Meanwhile, savings of €32m are to be achieved in cutbacks in the current budget of the Department of Transport next year.

Spending on road maintenance will be reduced by €9m next year with cutbacks spread across the board on repairs to national, secondary and regional roads, while the Government’s annual subvention to the CIÉ group of Bus Éireann, Irish Rail and Dublin Bus will also be cut back by 4.5% or €10m to €263.2m.

While such a measure could prompt CIÉ to seek an increase in bus and rail fares, Transport Minister Noel Dempsey has indicated the CIÉ group should be able to cope with the reduced subvention through increased operational efficiencies.

The Exchequer grant to the Road Safety Authority will also be reduced by €5.4m or 13% to €27.9m next year.

Car scrappage

CAR dealers have given a broad welcome to the Government’s decision to extend the car scrappage scheme until the end of June 2011.

The Society of the Irish Motor Industry predicted the measure would further increase employment in the sector.

New figures published by the Central Statistics Office yesterday show the number of new cars licensed in the first 11 months of 2010 rose by over 56% compared to the same period last year.

A total of 84,260 private cars have been licensed so far this year — up 30,302 on 2009 figures.

The car scrappage scheme will now run until June 30, 2011 as a result of yesterday’s budget. However, the discount allowed to motorists in reduced Vehicle Registration Tax off the price of a new car when they scrap vehicles 10 years or older is being cut from a maximum of €1,500 to €1,250.

Until the end of last month, a total of 16,468 cars were bought under the scheme, resulting in revenue for the Government of €57.6m.

Finance Minister, Brian Lenihan, also announced an extension of VRT relief on hybrid and flexible fuel vehicles for two years up to the end of 2012.

VRT relief on hybrid vehicles will be up to €1,500, while it will continue at up to €2,500 for plug-in hybrid electric vehicles.