FFI urges delay on fuel duty increase

Ireland faces fuel price increase as excise duty rise approaches.

Fuels for Ireland (FFI) is calling on the new Minister for Finance and the Irish government to delay the scheduled excise duty increase on August 1 this year. With the Oireachtas set to recess for the summer on July 11, there is limited time to address concerns about the financial impact on consumers and businesses, particularly in Border regions.

Kevin McPartlan, CEO of FFI, highlights that the excise duty increase will affect consumers, especially those near the border, where the price difference with Northern Ireland has already impacted local businesses. Forecourts in these areas have seen reduced business as consumers travel to Northern Ireland for cheaper fuel. He said: “The imminent increase in excise duty scheduled for August 1 will directly impact consumers, particularly in Border counties where the price gap with the UK is already causing significant challenges.”

Remind us why excise duty was reduced...

In March 2022, the Government reduced excise duties on petrol, diesel and marked gas oil to mitigate the impact of global energy price spikes following Russia’s invasion of Ukraine. Originally scheduled to end in August 2022, these reductions were extended, with the final phased restoration planned for August 1, 2024. This will result in an increase of four cents per litre for petrol and three cents per litre for diesel, further straining household budgets amid ongoing inflationary pressures.

In addition to the excise duty increase, a carbon tax rise of 2 cents per litre (cpl) and a 2cpl increase in the Renewable Transport Fuel Obligation are scheduled for January 1. These changes could result in a total rise of 5cpl for petrol and diesel over the next six months before VAT is applied.

Despite the excise duty reduction, the government's tax revenue has increased due to VAT on higher fuel prices. FFI argues that further tax increases will unfairly burden consumers while the state benefits from higher revenue.

Has FFI anything more to say?

FFI is also calling for the establishment of an Expert Group on Taxation to review fiscal policies related to energy. This group would aim to address concerns about the transition to sustainable energy, protect state revenue and ensure affordability for consumers.

McPartlan emphasised the need for immediate action: “On behalf of FFI 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. With the Oireachtas rising this Thursday, July 11, the Minister is short on time and needs to make a decision before the Dáil goes on summer recess. It is crucial to take immediate action. If no changes are made, the excise duty increase will proceed as planned.

“This issue should be a top priority on the new Finance Minister's agenda. Postponing the excise duty increase and establishing the Expert Group on Taxation will demonstrate a commitment to balancing fiscal responsibility with consumer affordability.”

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Published on July 10, 2024