Verona Murphy (Wexford, Independent) | Oireachtas source

I apologise for being late; it was due to the late delivery of the Government amendment. I welcome the Government decision to bring this Bill forward and to extend the time these tax reductions, and other supports, will be in place. However, while I agree in principle with the extension of the tax reductions I take major issue with the way the Government has decided to reapply the excise duty reductions on fuel. This is technical so I hope the Minister will listen intensely. This is dealt with in section 2. The explanatory memorandum states that section 2 provides for:

"an extension to the current VAT inclusive per litre reductions of 21 cent in respect of petrol; 16 cent in respect of diesel; and 5.4 cent in respect of Marked Gas Oil which were due to expire on 28 February 2023 ...

On 1 June the rates will be restored by 6 cent for petrol, 5 cent for diesel and 1 cent on [Marked Gas Oil] MGO. These rates will be in place until 1 September, when the rates will increase by a further 7 cent, 5 cent and 1 cent per litre for each of petrol, diesel and MGO respectively. The remaining balance of the reductions, amounting to 8 cent for petrol, 6 cent for diesel and 3.4 cent for MGO will be restored on 31 October."

We have a Bill before us claiming that the reductions were 21 cent for petrol, 16 cent for diesel, and 5.4 cent for marked gas oil. This appears to be at odds with a Government press release dated 9 March 2022, which stated:

"Excise duty will reduce by 20 cent per litre of petrol ...15 cent per litre of diesel. There will also be a reduction of 2 cent in the excise duty charged on marked gas oil. These reductions will take effect from midnight tonight and will remain in place until the 31st of August ..."

Many people would look at this and conclude that the Government are trying to pull a fast one and increase the excise duty by more than it was reduced. I am asking that, whether it is the case that the Government is trying to cod the people, we need an explanation and clarity on whether the excise duty is being increased by more than it was reduced. It is very important the Minister address this matter in his closing remarks.

Further to this, I received correspondence stating that on 1 January 2024 there will be an increase in the price of base product of 3.89 cent plus VAT, which is a total of 4.79 cent, on diesel, 4.59 cent plus VAT, or 5.65 cent, in petrol due to the content of biofuel, or an alternative fuel to diesel, being added to a diesel product. This has taken no account of the percentage of biofuel per litre, but it is being taxed as if it is diesel.

The other issue I will raise is hydrogenated vegetable oil, HVO. I have raised this previously and it is worth highlighting again. HVO is a low-carbon fuel and is obtained by processing different substances. It has similar chemical and physical properties to diesel, but is fossil free and low carbon by comparison. It can be blended and used in any proportion with diesel, or on its own in a traditional diesel engine. There are a couple of reasons this fuel source is not more widely available. It is currently more expensive to produce and buy than ordinary diesel. Some studies have shown that consumption is slightly higher. The production of the type of crops necessary to produce this fuel type is currently insufficient. The Government needs to make the fuel source tax free to help to make its price more competitive and to drive demand. The market, in turn, will react by producing more of the crops necessary. This helps support the agriculture sector as well. It is amazing that the use of this fuel source has not been incentivised more by the Government. Even if someone decides to use a higher proportion of HVO in their fuel, the Government still charges the full carbon tax even though their carbon emissions will be greatly reduced by the level of HVO content, if the level of HVO content in the fuel increases. The Government likes to refer to a just transition but when it comes to climate-related issues such as HVO being fossil free, I am afraid that what I have outlined does not sound like a just transition. I ask the Minister to address those issues in his closing statement.

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