‘We’ll see return to fuel tourism’ after excise duty restored
THE restoration of excise duty on fuel which kicked in yesterday will see a rise in ‘fuel tourism’, it has been warned, as people cross the border for cheaper rates.
The move meant that 4c, 3c and 1.7c has be added to petrol, diesel and marked gas oil respectively.
But industry chiefs have labelled the Government’s move as short-sighted, saying that many people living in border regions will simply travel a few miles to get much cheaper fuel. President of the Irish Road Haulage Association, Ger Hyland, explained how the disparity between UK and Irish prices for petrol and diesel will see the Government lose money while also heaping more misery on forecourt owners who are trying to compete.
He said: ‘The price of fuel in our nearest neighbour, Northern Ireland, is now on a par or cheaper than it is here, so we’re going to be encouraging fuel tourism and it’s going to have an effect on the economy here.
‘We use approximately 14 million litres of fuel a week here in Ireland. We’re currently paying five taxes on that, there’s €7.84million a week going into the Government’s coffers from the transport sector.
‘With the increase that’s being put back on it today, and in August, that’s going to rise to €8.68million. It’s huge in the scheme of things,’ he told RTÉ’s Morning Ireland.
He added that the increase to fuel costs will also make it harder for Irish businesses to compete against those based in mainland Europe.
‘The cost of getting our goods to and from the market has never been as high. We’re at a distinct disadvantage to mainland Europe. Our tolls have gone up twice already this year, the Government’s coffers were never as full, we’re facing an election and we would’ve thought that the Government would’ve kicked this can down the road,’ Mr Hyland added.
This is the second-to-last restoration of excise duty rates which were slashed as a result of serious increases due to Russian war in Ukraine. The last increase is set to be introduced in August.
The move was highly criticised by both lawmakers and lobby groups who said the decision will impact motorists and households alike.
Last month, Sligo-Leitrim TD Marian Harkin renewed her appeal to Finance Minister Michael McGrath to postpone the duty hikes.
She, too, warned of the potential for fuel tourism.
Ms Harkin said: ‘Last September, in the Dáil, I strongly suggested to the Minister that he postpone increases in excise duties that were due at that time. I told him these increases would cripple filling stations and retailers along the border, lead to business closures, cause job losses and put increased pressure on rural dwellers who have to use their cars more frequently than urban dwellers.
‘The situation will deteriorate further as the price difference for diesel and petrol at either side of the border will be even greater since the UK government, in its recent budget, postponed increases in excise duties on fuel for a year.’
According to Fuels for Ireland, from April 1 there will be a 15c per litre difference in the price of fuel between the North and the Republic.
Ms Harkin remarked: ‘The impact in counties like Sligo, Leitrim, Donegal, Roscommon and other rural counties is much greater than in largely urban areas.
‘The average number of kilometres driven per car per year is 17,500 in Sligo and Donegal, over 19,000 in Leitrim and Roscommon while the national average is just 16,300 kilometres.
‘This shows that car owners in rural areas drive significantly longer distances... while they are all disproportionately hit by these increases in fuel prices, the biggest hit is being experienced along the border.’
‘This will cripple filling stations’