Diesel and petrol set to rise by 4c a litre

THE cost of petrol and diesel is set to rise by about 4c per litre by next January as a result of the combined effect of increases in VAT and carbon tax announced in yesterday’s budget.

Motorists experienced the immediate effect of an increase in carbon tax on fossil fuels from €15 per tonne to €20 per tonne from midnight last night as it resulted in the average cost of a litre of petrol rising by 1.4c and diesel by 1.6c.

The imposition of the higher VAT rate of 23% from January 1 will add another 2.44c per litre on both petrol and diesel. The effect of increases in both VAT and carbon tax will see the cost of a litre of both fuels jump by 4c on pre-budget prices from the start of 2012.