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

I propose to take Questions Nos. 1 and 3 together.

At the outset, the Deputy should note that the Government and I are conscious of the implications of fuel costs for all sectors of society. This is reflected in the fact that in 2022, in light of the acute impact rising prices were having on households and businesses, the Government provided for excise rate reductions of 21 cent, 16 cent and 5.4 cent per litre on petrol, diesel and marked gas oil, respectively. These temporary reductions were due to end initially on 31 August 2022, but following a review and monitoring of fuel prices they were extended until February 2023, with a phased restoration beginning in June 2023, followed by a second restoration in September 2023.

A final restoration of excise rates was due to take place on 31 October 2023, but in budget 2024 I provided for a further extension until 31 March last, with a phased restoration occurring in two stages on 1 April last and 1 August next.

The first stage of this final restoration of mineral oil tax rate increases came into effect on 1 April 2024. Inclusive of VAT the mineral oil tax rates on petrol, auto diesel, and marked gas oil increased by 4, 3 and 1.7 cent per litre respectively. The amounts due as part of the final restoration scheduled for 1 August 2024 are similar in size. 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 2024 when the amount charged per tonne of carbon dioxide emissions increases from €56 to €63.50. The 9 October 2024 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 affect 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, embedded costs, as well as pricing policy at wholesale and retail level. The Government has provided relief to consumers and businesses since 2022 through a number of support measures including temporary reductions in excise. However, these measures were introduced as temporary support measures and involve an ongoing cost to the Exchequer while they are retained.

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 2024.

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