Oil-fuelled inflation not beyond our control

A FREQUENT observation from commentators in response to the latest inflation figures is that the impact of fuel cost rises is outside the control of the Government.

The Revenue website indicates that in addition to 21% VAT on diesel and petrol, there are also excise taxes of 36.8% on diesel, 44.27% on unleaded petrol and 54.7% on supergrade unleaded petrol.

A motoring organisation might be able to comment in more detail.

However, it appears these taxes increase in line with the underlying cost of oil thereby increasing the negative impact of fuel cost rises on inflation.

Last year, the Dutch government took a deliberate policy step not to increase its overall tax take on fuel to address this specific issue.

This indicates that at least one government believes it has some control over this inflationary pressure.

There may be an environmental argument for not doing anything, but that’s a different story.

Maybe windfall revenue increases are more important to the Revenue than concerns about the rate of inflation?

Donal Fellows

Cois na hAbhainn

Bailick Road

Midleton

Co Cork