Petrol vs. diesel: Budgetary Oversight Committee considers environmental impact of tax rates on vehicle fuel

Tuesday’s witness, Professor of Economics Edgar Morgenroth of Dublin City University, in February co-authored an ESRI study that assessed how Ireland’s fiscal policies influence many pollutant-generating activities, from food production to air travel.

Future hearings are planned involving businesses exposed to the cost of diesel fuel, including the Irish Road Hauliers Association.

Committee members are expected to focus Tuesday on Professor Morgenroth’s findings on the environmental impact of collecting lower rates of excise duty on diesel than on petrol. Ireland currently adds 48 cents of excise duty to each litre of diesel, 59 cents to petrol. The ESRI report concluded that, given diesel’s higher rate of emissions of nitrous oxide and particulates, raising excise rates on diesel could be justified.

“The Budget 2018 Tax Strategy Group Papers examined a possible pathway to equalisation of excise duty on petrol and diesel,” said Committee Chairman Colm Brophy TD. “The emissions scandal at Volkswagen has brought into question the long-term future of diesel engines. But in the shorter term, any change in excise policy must be carefully weighed, because diesel-operated vehicles remain ubiquitous on Irish roads and are essential for haulage and other industries.”

Committee proceedings can be viewed live here.

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