Where rates in excess of the civil service rates are paid, the amount in excess is taxable.
Some public bodies have higher than civil service rates because of historic union agreements decades ago whereby the unions in those bodies (or the ancestoral organisations of those bodies) were successful in an IR claim which gave them the civil service rates plus X%.
The Revenue Commissioners regard the civil service rates as being correct as these rates are based on real calculations into the cost of running a car. These calculations include "overheads" as well as running costs thus the amounts paid are more that the cost of petrol etc. Overheads include things like the costs of purchasing the car over a 5 year period using car finance, insurance, depreciation etc. The Dept of Finance goes through a detailed process every year when calculating the rates.
The "reduced mileage" rate on the D/Finance circular is the running costs only element which is used in certain circumstances.
The official position of Revenue and Finance has traditionally been very strong on anything in excess of D/Finance rates is regarded as taxable pay, though, I'm not sure how rigourously this is enforced in some public bodies in reality (anyone know?).