Drivers will continue to benefit from the continuation of the current excise reductions on fuel, meaning life should be a little easier unless market forces intervene.
The Minister for Finance Paschal Donohoe announced an extension to the current excise reduction of 21c per litre of petrol, 16c per litre of diesel and 5.4c per litre in respect of marked gas oil (green diesel).
Electric vehicle (EV) grants, worth up to €5,000, from the Sustainable Energy Authority of Ireland, are scheduled to continue until July. However, there will be a gradual reduction after that, which could well mean higher EV prices in the longer term.
There was no mention of changes to vehicle registration tax (VRT), which means electric vehicles continue to be favoured on taxation compared with petrol and diesel cars.
There will be a €7.50 increase on the current rate of carbon tax applied per tonne of carbon dioxide emission. The rate per tonne of carbon dioxide emitted for petrol and diesel will go up from €41 to €48.50 from October 12 as per the trajectory set out in the Finance Act 2020.
Carbon tax will increase by the same amount in every budget until 2029. The increase will be applied to petrol and auto diesel from midnight on budget night, September 27, and all other fuels on May 1, 2023.
The 2023 carbon tax rate increase impact for fuel bundles is as follows:
Petrol (typical fuel bundled) 60lt fill: impact of €7.50 increase (Vat included) is €1.28
On diesel, a typical fuel bundle of a 60lt fill: impact of €7.50 increase (Vat included) is €1.48.
On climate change, Mr Donohoe said: “I want to turn to one of the other key challenges of our times, climate change, the effects of which are becoming more frequent and more destructive.
“Protecting our environment is the responsibility of us all and government is acting to reduce emissions and support newer cleaner technologies, particularly in energy and transport.
“The additional funding needed for measures, such as retrofitting and more sustainable modes of travel, comes in part from carbon taxation and this is appropriate and will continue under this government.”
“However, I also recognise the sharp cost-of-living challenges currently being faced by society, so the Government is therefore proposing to offset this carbon tax increase with a reduction to zero of the National Oil Reserves Agency levy.
“The National Oil Reserves Agency levy which is collected at a rate of 2c per litre will help offset the carbon tax increase which means that the price at the pump will not go up as a result of taxes or levies.”