AA comments on Budget 2012

Rise in motoring costs will affect all households and businesses says The AA.

"Fuel is a basic price component in almost every good and service in the Irish economy. This adds to business costs and cuts disposable income. Families will be unable to spend that money elsewhere in the economy."

They are the words of the AA's Conor Faughnan in response to the rise in fuel prices announced in Budget 2012. From midnight last night petrol and diesel rose by 1.4 and 1.6 cent respectively and will rise even further in January when the VAT rate rises to 23 per cent. The AA estimates that these rises will cost the average family an extra €6 per month on fuel costs.

"This is basically a continuation of what the last government did. They hit fuel three times for a total of 17 cent per litre, now this latest budget adds another four cents on top.  Fuel sales are down by more than 6 percent this year. The result is likely to be the same - reduced fuel sales, reduced commercial activity and less money in circulation," commented Faughnan.

"We used to be much cheaper than Northern Ireland and our exchequer was boosted with cross-border sales. The UK was traditionally much more expensive than us but they have deferred their duty increases while we pile ours on to the point where we have lost that advantage. In all, this fuel increase could wind up costing the government money."

In addition to rises in fuel costs the annual rate of road tax will also increase with cars in band A and B - the lowest emissions - being hardest hit with increases of €56 and €69 respectively.

"This is going to feel like the worst sort of bad faith for drivers who bought new cars in the last three years and made the choice to buy clean and green." Continues Faughnan. "It will affect new car sales and it will also make people less inclined to believe future promises in this area."

Published on: December 7, 2011