Motoring lobby furious at fuel increase

An increase of 5p a litre in the price of petrol and diesel has drawn an angry reaction from motoring lobby groups.

An increase of 5p a litre in the price of petrol and diesel has drawn an angry reaction from motoring lobby groups.

The Automobile Association accused the Minister for Finance of "ripping motorists off" and warned the increase would have a major impact on inflation due to the expected rise in crude oil prices in the coming months.

Mr Conor Faughnan, the AA's public affairs manager, said that motorists were being treated "as if transport was a self-indulgent luxury when in fact it is a basic necessity."

Describing the Budget increase as "an absolute disgrace", he said: "The Minister has avoided borrowing by deciding to steal instead."

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The Society of the Irish Motor Industry, through its chief executive, Mr Cyril McHugh, said the Minister had taken advantage of a short-term dip in fuel prices on world markets. "Now prices are rising again, and the Minister's hike will undoubtedly rebound to the detriment of Irish motorists who are already paying over £3 billion in motor-related taxes."

The Irish Road Haulage Association said it was "furious" at the 5p increase in diesel.

Mr Gerry McMahon, the association's director of communications, said Mr McCreevy had promised, during emergency meetings with hauliers earlier this year, not to increase the price until low-sulphur diesel was introduced next year, and then only to increase the rate on normal diesel.

Instead, the Minister said the price of diesel with sulphur content above 50 p.p.m. (parts per million) would rise by an additional 5p next March.

"The Minister is going back on his word," said Mr McMahon.

He added there was no guarantee oil companies would have low-sulphur fuel available by the March deadline.

"Our national council will be meeting on Saturday to discuss this," he said.

While he said he did not know whether they would support industrial action, "I know the sentiment today is that they are very disappointed."

As regards the other "old reliables", the Vintners' Federation of Ireland welcomed the decision not to increase excise duties on beer and wine.

A spokesman for Bulmers, however, condemned the decision to increase the price of a pint of cider by 21p.

He stressed the increase would not be passed on to customers pending discussions with the Government on the "devastating impact" the move would have on businesses in the south-east, where up to 500 people are employed in the cider industry.

The anti-smoking group Ash Ireland, meanwhile, said it was "bitterly disappointed" at the 10p increase in the price of a packet of 20 cigarettes.

"This is a slap in the face for the Minister for Health who was openly campaigning for a £1 increase," said Ash's chairman, Dr Fenton Howell. "It was also a test of the Government's health strategy, and the Government has failed that test."

The increase brings the average cost of a packet of 20 cigarettes to £3.94.