The cost of petrol and diesel will climb later this week as the Government begins to wind back measures introduced shortly after Russia’s invasion of Ukraine last year caused fuel prices to rise dramatically.
From Thursday morning, the excise on a litre of petrol will climb by 5 cent while the price of diesel will go up by 6 cent.
The increase will see the average price of a litre of petrol climb to €1.62, according to figures from the AA, while diesel will go up to an average of €1.53.
Two further excise duty increases will be imposed later this year with one coming into effect at the start of September and a final increase to be imposed in October.
The cumulative impact of the duty restoration will add more than €200 to the annual cost of fuel for the average Irish motorist and leave the cost of fuel about 40 cent higher per litre than it was in the summer of 2020.
Once the full rate of excise is restored, the Exchequer will benefit by more than €700 million over the course of 12 months.
It comes despite the ongoing cost of living crisis, which has left the cost of domestic energy at more than twice 2020 levels, with grocery price inflation running at more than 16 per cent, according to retail analysts Kantar. The general rate of inflation still stands at more than 7 per cent.
Meanwhile, the UK government is looking at imposing price caps on British supermarkets in a move that was considered and discounted by the Irish Government earlier this month.
The UK has one of western Europe’s highest rates of inflation for food, with prices up by more than 19 per cent compared with a rate of some 13 per cent in the Republic, according to the latest figures from the Central Statistics Office (CSO).
As in this jurisdiction, large supermarkets in the UK have announced price cuts on some food items in recent weeks. However, the government believes more can be done which has prompted talks which, if successful, would see supermarkets charge the “lowest possible amount” for set products.
Just over two weeks ago, Minister for State at the Department of Enterprise Neale Richmond convened a meeting of the Retail Forum at which he called on supermarkets to start lowering the prices of staples.
After the meeting, he said he had “received assurances from retailers that, where reductions in input costs filter through to products, consumers will benefit from this”.
The meeting was condemned by the Opposition as “a capitulation, plain and simple,” with Labour’s enterprise spokesman Ged Nash saying it “promised little and it seems to have delivered even less”. He said there had been “no firm commitments” to lower prices, only an empty pledge for the price of basic staples to “remain competitive”.