Robbie Gallagher (Fianna Fail)
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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.

Niall Collins (Limerick County, Fianna Fail)
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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.

Robbie Gallagher (Fianna Fail)
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I thank the Minister of State for the response. It is vital the Government gets the impact this would have on Border filling stations, many of which are located in my own county of Cavan as well as in Donegal, Leitrim and Louth. This will have a devastating effect. While I am disappointed the Government is proceeding with the increase on 1 April, I take some solace from the fact the August increase may not happen. I earnestly implore the Minister of State to do all he can to ensure the August increase does not happen. The net result of the increase will be that many businesses - fuel stations - along the Border will close. We cannot allow that to happen because many of them are employers and many employers, particularly small businesses, are going through a difficult time at the moment, as I have no doubt the Minister of State is aware, due to the increased costs they have to incur as a result of Government legislation on pension auto-enrolment and the increase in the minimum wage. Those changes have impacts on employers' PRSI. Sick leave and other employee entitlements are welcome but have an adverse effect on small businesses and the Government needs to be conscious of that.

Niall Collins (Limerick County, Fianna Fail)
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The Government recognises that the decision by the UK Government not to restore its excise rates means that the differential for petrol, in particular, will increase between Northern Ireland and this jurisdiction. The Senator will be aware that Ireland and Northern Ireland operate significantly different tax regimes. For example, the VAT rate in the UK is 20% and the UK does not have a carbon tax. Furthermore, Ireland operates a diesel rebate scheme for essential road users and there is a VAT reclaim on diesel for commercial uses. These factors all impact a dynamic and variable effective fuel price, especially for businesses, which will likely be quite different in a pump price comparison. In addition, it is important to note that the national average prices have eased considerably from highs of more than €2 per litre in 2022. As per the Central Statistics Office consumer price index, the average national retail prices of auto diesel and petrol have decreased from approximately €1.85 per litre in October 2023 to approximately €1.72 per litre for diesel and €1.71 for petrol in February 2024. More recently, the European Commission weekly oil bulletin shows that the national average price as of 18 March 2024 was approximately €1.73 for petrol and €1.74 for auto diesel. I will take on board the concerns the Senator has raised and convey them to the Minister for Finance.