Tuesday, 26 February 2019
Department of Finance
Fuel Rebate Scheme
The Diesel Rebate Scheme has been in place since 2013. Under this scheme Revenue will repay some of the mineral oil tax paid by a qualifying road transport operator on diesel purchases when the diesel is purchased within the State and used in the course of business transport activities in qualifying motor vehicles.
Qualifying applicants can claim a rebate under the scheme when the VAT inclusive price of diesel exceeds €1.23 per litre, as determined by the methodology deployed by Revenue. The rebate amount progressively increases to the maximum amount repayable of 7.5 cent per litre when the VAT inclusive price is €1.54 per litre or over.
Ireland is one of only eight Member States that operates such a scheme and I am aware that there are different views on its merits. My Department's Energy & Environmental Tax Strategy Paper 2017 noted that the Diesel Rebate Scheme is a subsidy, or tax expenditure, and an ESRI study showed that the Scheme has encouraged greater consumption of diesel and this has had negative environmental consequences over the length of the scheme.
I made no change to the operation of this scheme in Budget 2019. As with all taxation measures, the operation of the scheme is kept under review as part of the annual Budget process each year.
Finally, I would point out to the Deputy that CSO consumer price data shows that the retail price of diesel has significantly decreased since October 2018.