Fuel prices set to rise in Budget 2022 1 month ago

Fuel prices set to rise in Budget 2022

The diesel increase could come into effect from next month.

Fuel prices are set to rise due to carbon tax increases in next month's budget for 2022.

Advertisement

Documents published by the Government's Tax Strategy Group on Thursday (16 September) estimate that a 60-litre tank of diesel will rise by €1.48 and that a 60-litre tank of petrol will go up by €1.28.

The increase would apply for diesel and petrol from Wednesday, 13 October and is a result of the government's carbon tax, which is part of its efforts to lower carbon emissions.

The current rate of carbon tax is €33.50 per tonne of carbon dioxide emitted.

However, the Finance Act 2020 legislated for annual increases in the rate out until 2030, with the increase in 2022 comprising of €7.50, bringing the overall rate to €41 per tonne of carbon dioxide emission.

The tax will also affect the prices of coal, kerosene, natural gas and peat. Increases to these fuels would come into effect from 1 May, 2022 to allow for the winter heating season.

The impact of the tax on specific fuel bundles can be seen in the table below.

Advertisement

The documents state that all new revenue raised through carbon tax rate increases is "hypothecated for expenditure" which will:

  • Ensure that the increases in the carbon tax are progressive through targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition
  • Fund a socially progressive national retrofitting programme targeting all homes but with a particular emphasis on the Midlands region and on social and low-income tenancies
  • Allocate funding to a REPS-2 programme to encourage and incentivise farmers to farm in a greener and more sustainable way.

The Tax Strategy Group is an interdepartmental committee chaired by the Department of Finance, with membership comprising senior officials and advisors from a number of civil service departments and offices.

The group is not a decision-making body and it notes that the documents it published on Thursday "are simply a list of options and issues to be considered in the budgetary process".

Advertisement