Seanad debates

Thursday, 21 March 2024

Nithe i dtosach suíonna - Commencement Matters

Fuel Prices

9:30 am

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail) | Oireachtas source

I thank the Senator for raising this issue for discussion. The Government is acutely aware that increased energy prices have posed significant challenges to households and firms. The drivers of inflation are global in nature and, accordingly, it is not possible for any one government to fully absorb the costs. Therefore, Government policy is focused on temporary and targeted measures aimed at the most vulnerable. The policy response has also been designed to avoid generating second-round effects that could lead to an inflationary spiral. The Government has responded swiftly and decisively multiple times to help offset the most severe impacts of inflation, with particular focus on protecting the most vulnerable. Careful management of the public finances allowed the Government to provide €12 billion in direct assistance to help to deal with the cost-of-living pressures between 2022 and 2023. Budget 2024 built further on those measures and provided a once-off cost-of-living package of measures worth €2.7 billion. It struck the right balance between providing support for our economy and society while not unduly adding to inflation.

The specific issue raised by Senator Gallagher today relates to the temporary excise rate reductions on petrol and diesel, which currently amount to 8 cent on petrol and 6 cent on diesel, and the partial restoration of these reductions from 1 April. Initially in March 2022, in light of the acute impact rising prices were having on households and businesses, the Government provided for excise rate reductions in the order 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 on 31 August 2022, but following a review and the 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. The final restoration of excise rates was due to take place on 31 October 2023, but in budget 2024, the Minister for Finance provided for a further extension until March 2024, with a phased restoration legislated to occur in two final stages on 1 April 2024 and 1 August 2024.

The Government, while recognising that households and businesses continue to face challenges, believes it must strike the appropriate balance between providing support and avoiding fuelling cyclical inflationary trends. Consequently, it does not propose to defer the already legislated for increases of 4 cent per litre for petrol and 3 cent per litre for diesel due on 1 April.

I also note that a range of additional supports are available to the small and medium-sized business sector. The Department of Enterprise, Trade and Employment provides a range of tailored supports, including access to finance, management, development, mentoring supports, business development programmes, market supports and trade promotion. In addition, an increased cost of business scheme was provided in budget 2024. The scheme is a one-off grant available to all firms to pay commercial rates that will benefit up to 143,000 SMEs at an overall cost to the Exchequer of €257 million. Some 95% of all small and medium-sized businesses operating directly within premises that are commercially rateable by local authorities should be eligible for this support.

Another significant initiative introduced by the Government to help small businesses is the tax debt warehousing scheme. It offered valuable and practical liquidity support to businesses during the Covid pandemic. Today, it continues to support businesses as they recover from the impacts of the pandemic and the cost-of-living crisis. It does so by assisting businesses with their cashflow during difficult trading periods, allowing them to continue trading. Revenue has confirmed that it is offering additional flexibility to customers with warehoused debt. This includes the possibility to extend, on a case-by-case basis, the duration of payment arrangements beyond the typical three to five years and an initial downpayment not always being required. Additional flexibility during the payment term may also be available and will be tailored to the individual circumstances of the taxpayer.

It should be noted that the Government will consider its position on the 1 August excise restorations on petrol and diesel of 4 cent and 3 cent, respectively, nearer the time of such restoration.


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