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

I thank Deputy Doherty for his question. The Government is 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 temporary cuts in excise rates which, inclusive of VAT, amounted to 21 cents, 16 cents and 5.4 cents per litre on petrol, auto-diesel and marked gas oil, MGO, respectively.

These temporary cuts to excise rates were initially due to end on 31 August 2022, but following review and monitoring of fuel prices, were extended until February 2023, with a phased restoration of rates occurring in June and September of last year. A final restoration of excise rates was due to take place on 31 October 2023 but the budget provided for a further extension until the end of March this year with phased restoration occurring in April and August of this year. The first of these restorations took place on 1 April 2024, adding 4 cent per litre to petrol, 3 cent to auto-diesel and 1.7 cent to MGO.

Carbon tax rate increases on petrol and auto-diesel are legislated to occur on 9 October 2024, when the rate of carbon tax will increase from €56 to €63.50 per tonne of carbon dioxide emitted. This will add 2.1 cent per litre of petrol and 2.5 cent per litre of auto-diesel, VAT inclusive. Carbon tax increases are implemented annually under the ten-year carbon tax trajectory that was introduced in the Finance Act 2020. The programme for Government committed to increasing the amount that is charged per tonne of carbon dioxide emissions from fuels to €100 by the end of this decade, and the ten-year trajectory of carbon tax increases delivers on that commitment. The commitment also features as one of the nine reform measures in Ireland’s National Recovery and Resilience Plan.

While I recognise that households and business continue to face significant challenges, the Government must strike the appropriate balance between providing support and avoiding fuelling cyclical inflationary trends. The Government has provided relief to consumers and businesses since 2022 through a number of support measures, including temporary reductions in excise. These measures were introduced as temporary support measures and involve an ongoing cost to the Exchequer while they are retained.

Finally, as I have said to the Deputy and to others in the House on a number of occasions, I will continue to monitor and review the position in the coming weeks in the context of the final phase of excise rate restorations due to take place on 1 August this year.

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