Motorists will have to pay about €2.50 more for full tank of petrol

Motoring Motorists will pay, on average, an extra €2.50 each time they fill up their tanks from today.

The five cents a litre increase in petrol and diesel prices announced in the Budget will add €65 a year to the bill of the average motorist who does 15,000 miles a year at 35 miles per gallon.

Mr Jimmy Quinn, of the Irish Road Haulage Association, said he was shocked by the decision.

"Fuel is not a discretionary purchase for our members, and the price rise will mean an increase of €25,000 a year for someone with a 10-vehicle fleet."

According to figures from the Society of the Irish Motor Industry (SIMI), motorists contributed €3.7 billion to the Government in taxes last year, with €1.5 billion coming from excise on fuel.

Vehicle Registration Tax (VRT) on new cars generated €777 million, according to the figures.

There was some relief within the car industry at Mr McCreevy's decision to leave VRT rates unchanged.

There had been suggestions that he might have widened the 30 per cent top band for VRT to include cars with engines over 1,800 cc.

SIMI had joined with the Consumers' Association of Ireland and RAC Ireland in a pre-Budget campaign calling for a reduction of 2.5 per cent in VRT and the reintroduction of a scrappage scheme for older cars.

While they were disappointed that none of these items were addressed, according to Mr Cyril McHugh of SIMI, "we are delighted he didn't readjust the VRT rates.

"Overall, we're pleased with the increased spending on roads, but disappointed with the increase in petrol duties."

Mr McHugh said the three lobby groups would probably run another joint campaign next year.

The new car market is expected to end the year down 7 per cent on last year, with 145,000 new car sales this year.