Dáil debates

Tuesday, 21 May 2024

Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Customs and Excise

9:35 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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63. To ask the Minister for Finance if he will cancel the increases in excise duty on petrol and diesel scheduled for August and October of this year, given the cost-of-living pressures facing households and their impact on trade for businesses in the Border region; and if he will make a statement on the matter. [22786/24]

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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Last month, the Minister increased the price of petrol and diesel and we see that now at the pumps across the State. The Minister is set to increase the tax further in just over 70 days and then again two months later. This will push the price of petrol up by another 6 cent and diesel by another 5 cent. This is happening at a time when workers and families continue to face a cost-of-living crisis. Businesses and forecourts, particularly in the Border region, are scratching their heads and asking how the Minister for Finance thinks they will survive when petrol will be 20 cent cheaper on the other side of the Border. Does the Minister accept that now is the time not to pursue the increases which he plans to make in 70 days?

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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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.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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This morning, Social Justice Ireland pointed out that the Minister's budget would widen the gap between the rich and the poor. If he has not noticed, low and middle-income families the length and breadth of this State are still struggling with high costs. Yet, what the Minister has planned are more price hikes for them. The Minister increased the price of petrol and diesel last month and he plans to do more in 70 days, and more again two months later. Who is affected mostly? All of the research shows that those in rural areas, those who are socially deprived and those who have the greatest dependence on car ownership will carry the burden of the Minister's continuous tax increases on petrol and diesel.

We can all admit that fuel prices have increased significantly since the start of the year and the Minister's Government is planning to heap more pressure on top of that. We have said very clearly right throughout this year that fuel prices have to be kept under review. It is clear that the trend is going in the wrong direction and it is likely that if the Government continues to increase the price of petrol and diesel, we will be charged €2 per litre at the forecourt within a very short period of time. Now is the time, I say to the Minister, to show flexibility. These taxes are not required at this point in time to buffer the coffers of the State. We have the resources available. At a time when families are really struggling with the cost of living, which is at crisis level for many of them, the Minister is planning to put more pressure on them by putting another 6 cent on petrol and another 4 cent on diesel, and it is absolutely the wrong thing to do at this time.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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As I said earlier, and I am happy to repeat it, I will keep the situation under review in advance of the final restoration which is due on 1 August. There is considerable volatility when it comes to fuel prices, not least because of the movement in the cost of a barrel of oil which is only one input cost. It increased in recent weeks.

It fell back again but it is moving in both directions. I keep a close eye on that and on future markets as well. As the Deputy will be aware, foreign exchange rates also have an impact, along with refining costs, distribution costs, and so on. All of that will be taken into account.

The other part of the Deputy's question relates to the carbon tax. We set out every year how the additional revenue collected from the tax will be spent. In budget 2024, almost €800 million was allocated to climate action measures and sustainable farming, and to ensure the most vulnerable are protected from the unintended increases in the tax. This represents an increase in budget 2024 of €165 million in the amount funded from the carbon tax increases in 2023. That is going on additional retrofitting of homes to ensure we can make progress, working with farmers on sustainable farm practices and to tackle fuel poverty.

9:45 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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The Minister does not get this. He proceeded with one increase last month, which was the wrong thing to do at the wrong time again. Now he s planning for and has legislated for this increase in 70 days and legislated for a further increase two months later. It is not just those people who are struggling. It is not just the people who have to fill their tanks. Every time they put a litre of petrol into their car €1 goes to the State. This is the tax on petrol at this point in time. It is just about those people, however. I asked numerous times about the businesses in my community. There are more than 300 Border businesses and forecourts. Many of them are family businesses and they support countless families in the community. Kids are being sent to college because they are working in these businesses, either on the petrol forecourts or in the adjoining shops. These people tell me very clearly that if this increase goes ahead and if the Minister continues to do what he did last month, they do not see their forecourt businesses surviving because a couple of miles down the road someone can buy a litre of petrol for 20 cent cheaper. Perhaps the Minister would have the detail as to when was the last time we had a price difference as big as we have now? At the minute it is 15 cent. There are people who are not coming to these stores because of the price of petrol. The finance minister in Britain decided to extend their reduction for a year. I call on the Minister to do what we have asked him to do from day one, which is to keep it under review. The prices are going in the wrong direction, families are struggling, businesses are worried whether they will be able to survive and he has legislated for not one but two increases, yet he will still not give a commitment here that he will not go ahead with it. Instead he says the same thing that every Minister for Finance says, which is " We will keep all taxes under review".

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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The Deputy will be aware that we are having this debate because the Government cut excise duty back in 2022. That was the right decision at the time. The restoration that has taken place since has been on a phased basis and one final phase of that restoration was due. I have given a commitment to the House on a number of occasions that this will be kept under review. Luckily I did not take the Deputy's advice in the budget last year, which would have involved putting up petrol prices by 8 cent per litre last month, diesel by 6 cent and marked gas oil by 3.4 cent. I did not take his advice and that was the right decision. The Government is acutely conscious of that cross-Border dynamic he mentioned. At different points in our history it has happened in different directions. Clearly on this occasion, for now, it is the case that fuel and particularly petrol is more expensive south of the Border than it is north of the Border. I am very much aware of that.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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A vote for Fianna Fáil is a vote for higher petrol and diesel prices.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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As I said, it is just as well I did not take the Deputy's advice-----

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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The Minister's advice was to keep it under review. He knows that well. He should be brutally honest please; a vote for Fianna Fáil is a vote for an increase in petrol prices.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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-----or we would have seen an 8 cent per litre increase last month.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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And if it is not, and if a vote for Fianna Fáil is not to increase petrol and diesel prices maybe the Minister will clarify that. I will give him the floor.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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It is just as well I did not take the advice or we would have seen an 8 cent per litre increase last month----------

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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A vote for Fianna Fáil is a vote for higher petrol and diesel prices.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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No, please-----

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Sinn Féin advocated for an 8 cent increase in petrol last month. It is just as well I did not take the Deputy's advice.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That question is over. We are moving on.