THE period of relatively low fuel prices, and the transient benefits it brought to the economy, has come to an end as oil prices rise after an extended period in the doldrums.
The AA tells us that a litre of petrol costs an average of 129.1c, up 3.1c, while diesel rose by 2.1c to 113.2c. Pump prices have begun to reflect the recent rise in the cost of oil which is around $47 per barrel, up from $44 last month. The AA also reports that a typical motorist spends around €193.65 per month on diesel or unleaded fuel. In a home where two people use a car, a common enough legacy of the last property bubble, that is a significant after-tax burden especially as around €130 of that figure goes directly to Government in tax.
These figures will add to the pressure on Government and business over pay rates. Unions representing workers facing growing cost of living expenses will be in no mood to play the long game and will increase pressure for early pay rises. Commuters forced to use cars because of the ongoing Luas dispute will be caught in a double whammy.
Obligations on confronting climate change mean that disincentives to fuel consumption are unavoidable but tax levels close to 70% on a staple of life seems bizarre especially as an alternative — reliable public transport — is not an option for so many people. These taxes will not be cut while so many public services are so underfunded. Yes, we pay a very heavy price for being, according to the OECD, a low-tax economy.
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