Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I propose to take Questions Nos. 6 and 31 together.

At the outset, the Deputies should note that the Government and I are conscious of the implications of fuel costs for all sectors of society. This is reflected, as I said earlier, in the fact that, in 2022, in light of the acute impact rising prices were having on households and business, the Government provided for excise rate reductions in the order of 21 cent, 16 cent and 5.4 cent on a litre of petrol, auto diesel and marked gas oil, respectively. These temporary reductions were initially due to end at the end of August 2022, but following review and monitoring of fuel prices, they were extended until February last year, with a phased restoration beginning in June of last year, followed by a second restoration last autumn. As the Deputy will be aware, a final restoration of excise rates was due to take place at the end of October last year, but in the budget I provided for a further extension until the end of March this year, with a phased restoration occurring in two stages on 1 April 2024 and 1 August 2024.

As the Deputy has referred to, the first stage of this final restoration came into effect on 1 April last. Inclusive of VAT, the mineral oil tax rates on petrol, auto diesel, and marked gas oil increased by 4 cent, 3 cent and 1.7 cent per litre, respectively. The amounts due as part of the final restoration scheduled for 1 August this year are of the same magnitude. In addition to rate increases related to reversing the 2022 mineral oil tax cuts, increases to the carbon component rates of mineral oil tax on marked gas oil are legislated to come into effect on 1 May 2024, when the amount charged per tonne of carbon dioxide emissions from non-auto fuels increases from €48.50 to €56.00. This increase, inclusive of VAT, will add 2.3 cent per litre to marked gas oil. Increases to carbon component rates of mineral oil tax on petrol and auto diesel are legislated to come into effect on 9 October this year, when the amount charged per tonne of carbon dioxide emissions increases from €56 to €63.50. The 9 October rate increases will add, inclusive of VAT, 2 cent per litre to petrol and 2.5 cent per litre to auto diesel.

A number of factors impact the final retail price of fuels, including energy market dynamics, wholesale pricing, individual retail pricing policy, transport costs, exchange rate fluctuations and taxation. While taxation affects the final retail price, amendments to tax rates cannot fully absorb price shocks given the larger impacts of energy markets and embedded costs as well as pricing policy at wholesale and retail level. The Government has provided relief to consumers and businesses since early 2022 through a number of support measures, including the temporary reductions to which the Deputy has referred. However, these measures were introduced as temporary support measures and involve an ongoing cost to the Exchequer while they are retained.

With regard to the parliamentary question from Deputy O'Sullivan, he should note that the estimated receipts in 2024 from the recent 1 April increase in mineral oil tax rates and the increase scheduled for 1 August are €102.4 million for the 1 April increase and just below €51 million for the 1 August increase. The Deputies should note that I will continue to monitor and review the position in the coming months in the context of the final phase of excise rate restorations due to take place in August this year.

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