The Republic has lost its petrol price advantage over Northern Ireland following the introduction of a carbon tax in the Budget earlier this month.
The Minister for Finance Brian Lenihan increased the price of petrol by 4 cent per litre with a litre of diesel going up by five cent.
According to the latest AA fuel price survey, petrol now costs an average of 122.4 cent per litre while diesel costs an average of 112.4 cent per litre. The average price for petrol in Northern Ireland is also 122 cent per litre
Diesel remains cheaper in the Republic because it is more heavily taxed in the UK. A litre costs a Northern Irish driver €1.24 on average however the price gap is narrowing - in September of 2008, diesel was 18 per cent dearer in the North.
The latest tax increases this means that approximately 70 per cent of the retail price of petrol in the Republic is made up of tax, in the form of excise duty, vat and the carbon tax while 58 per cent of the retail price of diesel is tax.
“In September of last year, before the government added 8 cent to excise duty, petrol was about 12 per cent cheaper in the Republic,” AA Director of Policy Conor Faughnan said.
“There was an established pattern of Northern Irish drivers crossing the border to refuel in the south, giving a big boost to southern tax receipts. We have scored a big own goal in shutting off that revenue completely. Government receipts from the Carbon Tax will be disappointing for just this reason,” he concluded.
