If fuel prices continue to rise at their current rate, it will have a catastrophic effect on the competitiveness of Irish products and services, both at home and abroad.
This is the view of Independent Galway West TD Noel Grealish who is calling on the Government to reconsider the tax take on fuel, given the rapid escalation in fuel prices and energy costs over the last couple of weeks.
“In order to stimulate economic growth, we need to make it less costly for businesses to operate,” he said. “Given the reliance on road as a method of transport in Ireland, addressing fuel costs is an essential step.”
Budget 2012 added 1.4 cent to the price of a litre of petrol and 1.6 cent to the price of a litre of diesel in carbon tax. It also added 2 cent in VAT increases in January. This follows increases in carbon tax and excise duty over the last couple of years, along with wholesale prices increasing internationally.
“Rising fuel prices threaten economic growth and our prospects for recovery and job creation, as it influences the price of every product and service,” said Dep Grealish.
“Given that the Government tax take is almost 60 per cent of the price of every litre of petrol and 50 per cent of the price of every litre of diesel, I believe there is a margin for a reduction.”
Dep Grealish said “the bigger picture” needs to be considered.
“Long term loss of competitiveness and increases in the cost of living and unemployment will far outweigh the short terms gains to the Exchequer in carbon tax, excise duty and VAT,” he said. “I have requested the Minister for Finance to address this situation as a matter of urgency.”
