Government told it has just days to postpone excise duty hike on petrol

Fuels for Ireland, the representative body for retailers said the rise would add of 4c per litre for petrol and 3c per litre for diesel.

On Budget night, the already agreed carbon tax increase will add 2c while the increased level of the Renewable Transport Fuel Obligation will put another 2c on top on January 1.

Each of these is before VAT is applied, meaning a total increase of 5c per litre to petrol and diesel in the next six months, before the excise duty increase scheduled for August 1.

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New Finance Minister Jack Chambers was urged by Fuels for Ireland to postpone the excise duty before the Oireachtas goes into summer recess this Thursday.

The group said the minister “has mere days to take action to prevent an additional financial burden on consumers as well as putting jobs at risk in Border regions”.

Fuels for Ireland chief executive Kevin McPartlan said excise duty had already been hiked in April.

“With this further increase, the Government is simply gouging hard-pressed consumers,” he said.

Mr McPartlan said forecourts near the Border had seen a severe reduction in business since April 1 as consumers began driving to Northern Ireland to fill up their tanks.

A further tax increase risked the viability of businesses in these areas, he said.

In March 2022, the Government implemented temporary cuts in the excise duty on petrol and diesel when Russia’s invasion of Ukraine led to fears of a litre of motor fuel hitting €2.

But it has been gradually restoring the full rate of excise duty since then, with the last move to fully bring back the old rate due in August.

Petrol and diesel prices at the pumps fell last month, giving a small boost to motorists, most recent survey shows. A drop in crude-oil prices and delays in delivering interest rate cuts in the US have contributed to lower demand for crude.

This has led to petrol prices falling 4c at the pumps to €1.79 a litre in June compared with the previous month.

Diesel prices were down 5c on the month to €1.71 a litre, according to AA Ireland’s monthly fuel price survey.

Fuels for Ireland repeated its call for the establishment of an expert group on taxation to thoroughly examine fiscal policies related to energy.

This multidisciplinary group would be responsible for addressing concerns surrounding the transition to sustainable energy, safeguarding state revenue, and ensuring affordability for consumers, it said.

Former Finance Minister Michael McGrath said in May that the final reversal of excise duty cuts on petrol and diesel would be “kept under review”.

Mr McPartlan said the imminent increase in excise duty scheduled for August 1 would directly affect consumers, particularly in Border counties where the price gap with the UK was already causing significant challenges.

“On behalf of Fuels for Ireland and our members, I urge the Government to act now to prevent exacerbating these issues, as it is not fair for consumers to bear this additional burden.”