This morning I am back on the topic of car insurance and motoring in general. What prompts this is a headline in the press today claiming that, “Cost of running family car down almost €180 on last year.” According to the AA, this is due to a fall in insurance premiums this year over last. That is not my experience matey. Mine almost doubled year-on-year for no apparent reason.

But that aside, what caught my eye was the pair of graphics included in the article and the information therein. I’m old enough to remember when hardly anyone bought a diesel car. There was a vague understanding that there were two diesels, red and green, and that was about it. But what swung it for the diesel was that it was cheaper than petrol. In fact the savings in a full year could run to thousands. So today we have far more diesel cars on our roads than petrol.

I don’t ever remember anybody back in the day actually explain why diesel was a cheaper fuel. Again in the vagueness, there was a general assumption it must be cruder, (pun,pun.), or at least less refined. Either way, the fact remained that diesel was/is the cheaper alternative. But things are changing and among other things, diesel exhaust has been declared a class-A carcinogen, up there with secondhand smoke. Oddly the woman smoking outside the school gates is roundly criticized and frowned upon by the very women who drive their bundles of joy to the school in a diesel four-wheel drive. Which is the better class of cancer for kids?

The two graphics this morning though, paint a different picture on price. The real price of a litre of petrol is 46.4c whereas the real price of a litre of diesel is 47c. But the average pump price of petrol was 131.9 cent per litre in July and the same for diesel cost 119.202 cent. The difference is the Government. You see, the oil companies can drill for it, ship or pump it to a refinery, refine the stuff, store it, truck it to a petrol station near you and everyone along the way can take their cut for less than 50c a litre for either product. Then your elected representatives step in and politics takes over.

Excise is another word for tax and both petrol and diesel cost more in excise alone than for the stuff itself, (57.771c & 47.902c in Excise respectively). So over half the cost of a gallon of either is tax. However, they are not happy with that so they loaded on VAT at the rate of 24.7c and 22.3c respectively. Notice that with a VAT rate of 23%, what they have done is add the Excise first to the real price and then applied VAT to both. You pay VAT on the Excise or a tax on a tax. So your 46.4c for the litre of petrol now has another 82.471 in combined tax added to it. Most cars have a fuel capacity of 60 – 70 litres so the average full tank of petrol costs around €85.80. Without the combined Excise and VAT it would cost €30.00. So each time you fill your petrol tank you are paying €55.80 in tax. Did you realise that? Similarly with filling the diesel tank, you actually pay €77.35 for stuff that really costs €30.55.

And there is one last penalty for the car owner, one I was not aware of. Did you ever hear of NORA? According to their website, The National Oil Reserves Agency is responsible for ensuring that Ireland meets its obligations under EU Legislation and International Energy Agency (IEA) rules to maintain a minimum of 90 days stocks of oil for use in the event of a physical shortage of supplies. NORA is also responsible for administering Ireland’s Biofuels Obligation Scheme. So NORA gets 2 cent from every litre of juice we all buy every week.

There are a whole load of Government Agencies which have been set-up over the years with very little fanfare and for the politicians, these Agencies are the ideal vehicle to repay favours done for them. Senior managers can be given jobs for life with the prospect of a seriously good pension in the end. Our Nora deals in big numbers too. Their Statement of Income and Expenditure for 2016 puts income at €131,766, 000. That’s a lot of two-cent coins in a single year They have a Chairman, a Chief Executive, four Directors and a management team of four. They list their retirement benefit reserve asset at €317,000 that year. I’m no accountant so I can only assume salaries, expenses and benefits are buried someplace in the eye-watering numbers. It’s a cushy number, isn’t it?

On top of all of this, you pay VAT & Excise on the purchase of a new car, vehicle registration tax, you pay the road tax, (which runs Irish Water), you pay VAT on car insurance, VAT on repairs, VAT on fines and VAT on new tyres, among many other things I have forgotten at the moment. I have no doubt that if you costed your real motoring expenses over the life of your car, four-fifths of it would be taxation. And mostly we use our car to get to work so that we can pay income tax on our earnings.

I rest my case!