Seanad debates

Thursday, 21 March 2024

Nithe i dtosach suíonna - Commencement Matters

Fuel Prices

9:30 am

Photo of Robbie GallagherRobbie Gallagher (Fianna Fail) | Oireachtas source

The Minister of State is very welcome to the House this morning. There are 390 filling stations located along the Border in counties Monaghan, Cavan, Leitrim, Louth and Donegal. All of them will suffer financially as the Government restores the full rate of excise duty on fuel on this side of the Border while the UK Government has decided to postpone its increase due to cost-of-living pressures. Filling stations on this side of the Border will pass on the increase, adding 4 cent to the price of a litre of petrol and 3 cent to the price of a litre of diesel from 1 April. Worse still, another increase in excise duty of 5 cent on petrol and 4 cent on diesel is expected in August and further increases are on their way within the next 12 months. Ultimately, this will mean that drivers in the Republic will have to pay 15 cent more for petrol and 12 cent more for diesel, leading to us having the highest fuel prices in Europe.

This will unfortunately lead to Border tourism with regard to fuel. Drivers will simply cross the Border to purchase cheaper fuel and this will have two direct impacts. First, forecourt operators in Monaghan, Cavan and other Border counties will see a significant reduction in demand for their product. It is estimated that the difference in fuel price will be so wide that many forecourts will be in danger of closing altogether. As sales plunge, so too does the excise duty collected, potentially leading to a reduction in State income as opposed to an increase. I urge the Minister of Finance to revisit this decision and to postpone the increase in excise duty in light of a similar action taken by his counterpart in the UK. Consumer advocates also point out that higher fuel prices have an effect on lots of other goods and services, thereby pushing up the cost of living.They are looking for a postponement of the hikes in excise duty due in April and August until after the next budget. Such a decision would, as I outlined, be similar to one made by the UK Chancellor of the Exchequer, Jeremy Hunt, who has postponed that decision for 12 months.

The Minister has already stated that the Government must strike the appropriate balance between providing support on the one hand and avoiding cyclical inflationary trends on the other, and I understand that fully. Perhaps the call from the industry and others for the establishment by the Department of Finance of an expert group to review the taxation of energy for transport and heating makes good sense in light of the fact we have the target of net zero emissions by 2050.

Border retailers are once again finding themselves on the front line of price increases and that must be acknowledged. I hope the Minister of State will have some positive news for me in his response.


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