Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Senator for bringing forward these amendments. I will say a word about each of them in turn.

The amendments propose various further rate reductions from 1 May until budget day. The Senator seeks to reduce the mineral oil tax rates on petrol and diesel to the minimum rates, as prescribed in the energy tax directive, and to further reduce the rate on marked gas oil by 2 cent. The amendment also seeks to remove the carbon component on kerosene by reducing the overall rate to zero. The proposed mineral oil tax rate for diesel would not be compliant with the minimum rate set out in the energy tax directive. That is the key point. What we are being asked to do by Sinn Féin is not allowable under the energy tax directive of the European Union. We cannot do this.

The combined effect of the measures the Government has already provided means that the current minimum tax rate for diesel, in addition to the diesel rebate scheme, is effectively at the minimum rate allowable under the energy tax directive. Any further excise reduction, as the Senator is proposing, would bring the effective rate below the minimum permissible rate. To apply a mineral oil tax rate of 33 cent per litre would mean the Government would have to scrap the diesel rebate scheme, which is a targeted support for hauliers and public transport operators.

Mineral oil tax on kerosene for home heating has a non-carbon component rate of zero. The carbon component is €103.83 per 1,000 l. In other words, there is only carbon tax on kerosene. The Senator proposes to completely remove the carbon tax element, thereby reducing the mineral oil tax to zero. Similarly, the reductions the Government has provided for in the rate of mineral oil tax and marked gas oil mean that the non-carbon component is zero until 12 October. As there will only be carbon tax on the fuel, this means the further reductions in mineral oil tax proposed by the Senator would also involve reducing the carbon component on this fuel.

Senators will be aware of the Government commitment on carbon taxation. We appreciate that the decisions made recently on fuels from 1 May were particularly challenging for many, but this is the reason the Government went ahead with measures to reduce VAT on gas and electricity. The cash effect of those measures in reducing the VAT on those forms of energy will more than offset the increased price of home heating oil for households.

For these reasons, I am not in a position to accept the amendments brought forward by Sinn Féin. Some of them are simply undoable and would involve a breach of European Union law. In recognition of the difficulty and hardship some are facing as a result of the increase in carbon taxation in home heating oil from 1 May, the Government has brought in a set of additional measure which will have the effect of more than offsetting the impact of the change in carbon tax on home heating oil. For these reasons, I cannot accept the amendments.