Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The final retail prices of fuel is determined by a number of factors including energy market dynamics, wholesale pricing policy, transport costs, exchange rate impacts, taxation and individual retailer pricing policies.

In the context of increases in consumer prices in 2022, the Government implemented a reduction in Mineral Oil Tax (excise duty) on petrol and diesel by 20 and 15 cent per litre respectively; and a reduction in the excise duty associated with MGO by 2 cent per litre – all effective from 10 March 2022. A further 1 cent per litre reduction was also applied to auto diesel and petrol from 1 April 2022 to offset potential increases in retail prices arising from increases in the biofuel obligation scheme. A further 3.4 cent reduction applied to MGO from 1 May 2022, fully offsetting the carbon tax increase.

These measures were scheduled to last until 31 August 2022 but were first extended until budget day and then to 28 February 2023. The Government decision of 21 February 2023 provided for a further extension until 1 June 2023 with a phased restoration of dates in three phases:

• 1 June – VAT inclusive increase of 6 cent on petrol, 5 cent on diesel and 1 cent on MGO.
• 1 September - VAT inclusive increase of 7 cent on petrol, 5 cent on diesel and 1 cent on MGO.
• 31 October - VAT inclusive increase of 8 cent on petrol, 6 cent on diesel and 3.4 cent on MGO.

The cost of these excise rate reductions from implementation on 10 March 2022 until 31 July 2023 in revenue foregone is estimated to be approximately €1 billion.

Finally, the Deputy should note that in Budget 2024 the Government will set out its taxation and expenditure decisions in response to the cost of living pressures currently being faced by many households.