Michael Fitzmaurice (Roscommon-Galway, Independent)
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125. To ask the Minister for Finance if he will reduce the taxes on fuel and home heating oil similar to other EU countries (details supplied) to ease the pressure on vulnerable persons and hauliers; and if he will make a statement on the matter. [53709/21]

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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158. To ask the Minister for Finance if the diesel fuel rebate for hauliers will be increased as an acknowledgement of the current price of fuel; and if he will make a statement on the matter. [54249/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 125 and 158 together.

The final retail price of fuel is determined by a number of factors which include the costs of production, distribution, global market factors, international exchange rates, taxation, wholesale market contracts as well as individual retail pricing policies.

The current spike in energy prices arises principally from the global recovery from the Covid-19 pandemic and is being witnessed across the European Union as well as many other regions.

With regard to home heating fuels and taxation, the Deputy will be aware that a reduced rate of VAT applies to all home heating fuels. In relation to the Carbon Tax increase, I have delayed its application on home heating fuels until May 2022 to allow for the passage of the winter heating season. In addition, in line with Government policy, the additional revenues raised from the increase in carbon tax have been allocated to expenditure measures which ensure a just transition through targeted social welfare measures, investment in energy efficiency and through funding for the agricultural sector. This package is informed by ESRI research which finds that the net impact of the measures is progressive. The use of targeted welfare measures ensures that those most vulnerable to fuel poverty are protected.

For large scale diesel consumers such as those involved in the road haulage and public transport sectors, the Deputy will be aware that the Diesel Rebate Scheme was introduced by my predecessor in 2013. This Scheme offers a partial excise refund to qualifying operators based on the retail price of diesel. The scheme is designed to provide a level of support when the retail price of auto diesel is relatively high. The rebate kicks in when the price at the pumps goes above €1.23 per litre; increasing gradually to a maximum rebate of 7.5c when diesel reaches €1.43 per litre. In Budget 2020, I provided for a temporary enhancement to the scheme in light of the challenges arising from Brexit uncertainty facing the industry. This involved a doubling of the marginal rate of compensation at prices over €1.32 (VAT inclusive) up to the maximum repayment rate of 7.5 cents per litre. In recognition of the vital role that the haulage sector plays in the economy, I have maintained this enhancement to the scheme which offers more generous conditions to essential users. This measure is aimed at maintaining the competitiveness of the road haulage sector and minimising the impact for the sector and related businesses which rely on road haulage services. Passenger transport also benefits from this scheme which is available to passenger bus operators.

The Deputy may also wish to note that businesses that are registered for VAT may deduct the VAT charged to them on the purchase of business inputs, such as road diesel and other motoring costs.