Michael McGrath (Cork South Central, Fianna Fail)
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At the outset, the Deputies should note that both I and the Government are conscious of the implications of fuel costs for all sectors of society.

This is reflected in the fact that in 2022 in light of the acute impact rising prices were having on households and business, the Government provided for excise rate reductions in the order of 21, 16 and 5.4 cent per litre on petrol, auto diesel and Marked Gas Oil (MGO) respectively. These temporary reductions were due to end initially on 31 August 2022 but following review and 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. A final restoration of excise rates was due to take place on 31 October 2023 but in Budget 2024, I provided for a further extension until 31 March 2024 with a phased restoration occurring in two stages: on 1 April 2024 and 1 August 2024.

The first stage of this final restoration of Mineral Oil Tax rate increases came into effect on 1 April 2024. Inclusive of VAT the Mineral Oil Tax rates on petrol, auto-diesel, and marked gas oil increased by 4, 3 and 1.7 cents per litre respectively. The amounts due as part of the final restoration scheduled for 1 August 2024 are similar in size , i.e. 4, 3 and 1.7 cents per litre respectively.

In addition to rate increases related to reversing the 2022 Mineral Oil Tax cuts, increases to the carbon component rates of Mineral Oil Tax on marked gas oil are legislated to come into effect on 1 May 2024 when the amount charged per tonne of carbon dioxide emissions from non-auto fuels increases from €48.50 to €56.00. This increase, inclusive of VAT, will add 2.3 cents per litre to marked gas oil.

Increases to carbon component rates of Mineral Oil Tax on petrol and auto-diesel are legislated to come into effect on 9 October 2024 when the amount charged per tonne of carbon dioxide emissions increases from €56 to €63.50. The 9 October 2024 rate increases will add, inclusive of VAT, 2 cents per litre to petrol and 2.5 cents per litre to auto-diesel.

While I recognise that households and business continue to face challenges, the Government must strike the appropriate balance between providing support and avoiding fuelling cyclical inflationary trends.

A number of factors affect the final retail price of fuels including energy market dynamics, wholesale pricing, individual retail pricing policy, transport costs, exchange rate fluctuations and taxation. While taxation affects the final retail price, amendments to tax rates cannot fully absorb price shocks given the larger impacts of energy markets, embedded costs as well as pricing policy at wholesale and retail level. The Government has provided relief to consumers and businesses since 2022 through a number of support measures including temporary reductions in excise. However, these measures were introduced as temporary support measures and involve an ongoing cost to the exchequer while they are retained.

Finally, Deputy should note that I will continue to monitor and review the position in the coming months in the context of the final phase of excise rate restorations due to take place in August 2024.