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Motorists are being warned to prepare for higher fuel costs following a series of policy measures that came into effect at the start of the year. Fuels for Ireland has urged the Government to re-examine the current fuel taxation framework, arguing that recent changes are placing additional strain on households and businesses.

The industry body has indicated that petrol and diesel prices are expected to rise by between four and six cent per litre. These increases stem from adjustments introduced from 1 January, rather than movements in global oil markets or commercial pricing decisions.

According to Fuels for Ireland, changes to the Renewable Transport Fuel Obligation are expected to add approximately four cent per litre to fuel prices. A further increase of around one cent per litre is linked to a rise in the Better Energy Levy on petrol and diesel, along with associated VAT.

The organisation’s chief executive has criticised what he describes as a piecemeal approach to policy, suggesting that successive charges are being applied without an overarching strategy. He argues that consumers are ultimately bearing the cost of layered regulatory and tax measures, rather than responding to underlying market conditions.

Fuels for Ireland claims that cumulative policy changes over recent years have pushed Ireland’s fuel prices close to the top of the European scale. The group says this is intensifying pressure on families, small businesses and the transport sector at a time when living and operating costs remain elevated.

It estimates that policy decisions over the past five years have added roughly €19 to the cost of filling a standard 60-litre fuel tank. This figure includes the most recent increase of approximately five cent per litre introduced at the beginning of 2026. Annual carbon tax increases, rising obligations under the Renewable Transport Fuel Obligation, and higher targets under the Energy Efficiency Obligation Scheme have all contributed to these costs. Fuels for Ireland has also highlighted that VAT is applied on top of these charges, resulting in motorists paying tax on tax.

The Department of Finance has responded by noting that while taxation plays a role in determining retail fuel prices, it cannot fully offset price pressures arising from broader energy market dynamics, embedded costs and wholesale and retail pricing structures. The department stated that the Government remains aware of the impact of fuel costs across society and maintains that the carbon tax system is designed to be progressive.

Concerns have also been raised by the Irish Road Haulage Association, which has warned that the cumulative effect of recent measures is severely squeezing margins for transport operators. Its president has suggested that many hauliers are struggling to remain viable and has indicated that protest action could emerge if members feel they have no alternative.

While Fuels for Ireland has reiterated its support for the transition to cleaner energy, it has cautioned that climate ambition must be matched with clear planning. The group is calling for an independent expert review of Ireland’s fuel taxation framework, with the aim of ensuring climate targets are achieved in a manner that is fair, transparent and economically sustainable.

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