Motorists and businesses spent €5.5 billion on the oil products needed to fuel transport in the Republic last year, the latest figures show.

A report from State agency Sustainable Energy Ireland (SEI) shows that the Republic is 99 per cent dependent on imported oil to stay on the road.

According to SEI, transport energy costs, excluding flying, hit €5.5 billion last year.

The agency estimates that transport produced over 16 tonnes of greenhouse gases last year, 35 per cent of the Republic's total.

Road freight transport is the biggest contributor to this. SEI said yesterday that the amount of energy it uses increased by 255 per cent from 1990 to 2006.

Private car transport has doubled over the same timeframe. As of the end of last year, 420 out of every 1,000 Irish people owned cars.

Last year, transport was the only sector that substantially increased greenhouse gas emissions.

Other businesses, including power production, managed to cut emissions.

The Government is planning to spend at least €40 million of taxpayers' money next year on carbon credits, which give the Republic a licence to produce more greenhouse gases than allowed under international agreements like the Kyoto Treaty.

The cash is part of an overall €270 million that the Government intends spending on carbon credits between next year and 2013.

The Department of the Environment, which has responsibility for the carbon credit scheme, said recently that transport was a major contributor to greenhouse gas emissions.

SEI's figures show that motor fuel prices have jumped by 50 per cent since 1990.

Diesel cost 68 cent a litre in 1990 and this year has averaged around €1.06.

Petrol was 76 cent a litre in 1990 and this year has averaged at €1.10, but is currently around €1.15 at the pumps.

Fuel companies predict that petrol could reach €1.20 if world oil and gasoline prices continue to increase.

Commenting on the figures yesterday, Minister for Energy Eamon Ryan warned that as world oil prices were at a record, "we will have to change our ways, inaction is not an option".

SEI's chief executive David Taylor said that the proposed linking of vehicle registration and motor tax to carbon emissions, announced in last week's Budget, was an "important step" in addressing emissions targets.

The agency's report shows that energy use in the commercial and public services sectors was actually down last year, and demand for electricity in those businesses dropped by over 4 per cent.

Industry used around 2.7 million tonnes of oil in 2006, an increase of 1.7 per cent on 2005.

SEI said that excluding upstream emissions from electricity generation, manufacturers produced 5 per cent less greenhouse gas than in 2005.

SEI is a taxpayer-funded State agency charged with promoting the development of sustainable energy.