Ireland will become the most expensive country in Europe for diesel within the next two weeks, Fuels for Ireland has warned.
The lobby group is claiming that a carbon tax increase is one of the few things that is certain on Budget Day.
It said it expects a 2c increase to come into force on October 1st – something that would push Ireland to the top of the European fuel price rankings, exacerbating "an already high cost of living."
In a statement, it said the change will make Ireland Europe’s most expensive country for diesel and one of the most expensive for petrol.
The group is now calling for the creation of an expert group to review fuel taxation policies.
"This expert group would evaluate how fuels for transport and heating are taxed and explore better support for the transition to sustainable energy," Fuels for Ireland says.
Its CEO Kevin McPartlan told Newstalk Breakfast an increase in petrol prices is one of the few certainties.
"One of the few things that is certain in advance of Budget Day is the increase in carbon tax," he said.
"That's going to put a couple of cent on to a litre of petrol and diesel at the forecourt pumps.
"What that will mean is we become the most expensive place in Europe to buy diesel and one of the top five most expensive places to buy petrol".
'It doesn't work'
Mr McPartlan said the change will see "60.4% of the total price of petrol paid is tax - and for diesel that's 56.7%".
"We think the Government needs to have a really hard look at this," he said.
"We've been saying now for a while we need to have an expert group that reviews the taxation policy on fuel.
"For a number of years we've been told that by increasing the price of fossil fuels you'll drive people away from those and move them towards renewable [and] sustainable energy.
"It doesn't work - prices do not have the same impact on fuel as they do on other products because the normal rules of price elasticity don't actually apply".
Mr McPartlan suggested that people don't decide whether to drop their children to school or have goods delivered on the basis of the price of fuel.
'Joined up thinking'
Mr McPartlan said there needs to be more joined up thinking around pricing.
"I don't believe there was ever an intention from this Government to have the most expensive diesel in Europe," he said.
"The reason that we want an expert group is because there's a lack of joined up thinking".
A planned carbon tax increase of 2 cents per litre is likely to be announced on October 1st.
A survey conducted for Fuels for Ireland earlier this month showed 80% of drivers would support the establishment of an expert group on taxation.
