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.
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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.
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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".
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