Is it time for a tax on petrol?

A tax on fuel, petrol-lubricants and diesel would make the Government more revenue and save the Irish economy money.

The Department of Finance is considering a levy of 0.1pc on petrol, 0.5pc on diesel and 0.3pc on lorries to be introduced by 2020, in an effort to reduce fuel bills and carbon emissions.

But the Government faces major challenges in convincing people of its need to change the way we buy fuel.

More than half of consumers in Ireland use more than 100 litres of petrol or diesel per week, according to the National Household Survey.

A third of Irish households are using at least 10 litres per week.

People who have bought petrol or the equivalent diesel for over a year or more do not pay income tax on their purchases.

It is estimated that around one million people in Ireland pay no income tax at all.

This is the second time that the Government has introduced a fuel levy.

In 2010, it raised fuel excise from 3.5 cents to 5 cents per litre and from 7.5 to 9 cents per liter.

Fuel tax was cut to 2.25 cents per kilo in 2016.

However, the levy on diesel was cut in 2018.

At present, the Government collects around €400 million ($450 million) from fuel taxes and the levy has been on a steady rise.

Currently, the total excise on petrol and diesel is €4.5bn and €3.5 billion respectively.

Under the proposed levy, a person buying diesel would pay a maximum tax of €2.60 per litres, a levy on petrol of €3 per liter and a levy to the Department of the Environment of €0.60.

According to the Government, this will raise about €6bn over the next four years.

Irish Independent