Written answers

Tuesday, 21 May 2013

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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260. To ask the Minister for Finance his views on the fact that although diesel and petrol have come down in recent times, the Automobile Association has stated that prices are still too high; and if he will make a statement on the matter. [24202/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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Ireland, as with other countries, has experienced an increase in fuel prices. This increase is an international phenomenon. Fuel prices are driven by a number of factors including the price of oil on international markets, exchange rates, production costs and refining costs. The rise in oil prices over recent periods reflected additional factors such as geopolitical uncertainty in Northern Africa and the Middle East with potential supply disruptions. The Exchequer yield from excise, as excise is set at a nominal amount, does not increase as the price of fuels increase. On the other hand, the yield from VAT per litre of fuel, as VAT is set as a percentage of the price, increases as the price of fuels increase. It should be noted however that businesses are entitled to reclaim VAT incurred on their business inputs, including VAT incurred on fuel. For example, VAT incurred on auto-diesel and marked gas oil (MGO or green diesel) used in the course of business is a deductible credit for business in the Irish VAT system.

The Deputy will also be aware that, in the context of Budget 2013, I provided for relief from excise duty on auto diesel for qualifying road transport and passenger transport operators.

There are no plans for further taxation adjustments as to do so could lead to significant costs to the Exchequer.

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