The impact of the reduction in excise duty that took effect overnight has started to be felt on forecourts around the country with the price of diesel falling in some instances by 10 cent, mirroring the tax cut the Government announced over the weekend.
In other cases, the prices remained static, a reflection of what Fuels for Ireland had previously warned might be a staggered approach to the price cuts depending on when a forecourt last received a delivery.
On Tuesday, its chief executive Kevin McPartlan said he understood motorists would want to see the excise reduction reflected at the pump as quickly as possible. However, he stressed it was “important to say that this may not happen at every forecourt immediately, and that should not be misunderstood as a failure to pass on the tax cut.”
He pointed out the reason for some delays was “practical” and said excise duty is applied “when fuel leaves a terminal or refinery, not when it is sold at the pump”.
READ MORE
McPartlan warned there “may be limited movement at some pumps immediately after the new rate takes effect from midnight. The reduction is coming through, but there will be a lag as lower-duty fuel works its way through the system.”
He said while some busy fuel forecourts may update quickly, “others it may take 48 to 72 hours, with the overwhelming majority expected to reflect the lower rate by the weekend.”
Some operators were faster than others.
On Monday, the Circle K in the Dublin suburb of Cabra was charging €2.18 for a litre of diesel and €1.92 for a litre of petrol but early on Wednesday morning the price had fallen to €2.08 for diesel and €1.82 for petrol.
The supports announced by Government to combat price rises
- Extending the temporary measures to reduce excise duty on petrol, diesel and Marked Gas Oil from the end of May to the end of July.
- Further reducing mineral oil tax rates by 10 cent per litre on petrol, 10 cent per litre on diesel and 2.4 cent per litre on Marked Gas Oil from April 15.
- Postponing the increase in carbon tax from May until Budget in October.
- Enhancing the Transport Support Schemes for some groups.
- Introducing a Fuel Subsidy Support Scheme for farming and fisheries.
By contrast, there was no early price movement at the Texaco station on Leitrim Street in Cork which was selling diesel for €2.19 and petrol at €1.91 some 10 hours after the excise cut came into effect, the same price it was charging the previous night.
On Tuesday evening, the Applegreen station on the Tuam Road in Galway City quoted The Irish Times a price of €2.19 for a litre of diesel, while petrol was retailing for €1.91.
On Wednesday morning, hours after the tax cut kicked in, it said diesel had dropped to €2.09 while petrol was retailing for €1.82
[ How much will petrol and diesel cost after new measures kick in this week?Opens in new window ]
When The Irish Times called the Kilmartin N6 Service Station in Athlone on Tuesday night, it quoted a price of €2.18 for a litre of diesel and €1.94 for petrol.
On Wednesday morning, the staff member who answered the phone said he was in the process of changing the price, although he declined to say what the new price was going to be.
“We don’t give out prices over the phone, you will have to drive by if you want to check it,” he said.
It was not the only place that declined to give out a price over the phone with several others saying not sharing price information to callers was a long-standing policy aimed at making it harder for the competition to price match.
At the Innisfree service station on Pearse Road in Sligo, diesel was selling for €2.14 before the excise cut came into play. The price had fallen to €2.07 while a litre of petrol which had been retailing at €1.82 on Tuesday was selling for 10 cent less 12 hours later.
While the excise duty cut will have an impact on fuel prices across the country, it is not the only factor that will shape how much motorists pay in the days ahead with oil prices on global markets having a more significant effect.
There was some good news for motorists on Wednesday with the price of a barrel of Brent crude hovering at the $96 mark over the course of the morning, as much as $20 less than it was at the height of the pricing crisis in the middle of March.
Markets, however, remained extraordinarily volatile and, industry sources have warned if sentiment shifts and traders develop a more negative view of what is happening in the conflict in the Middle East, prices could climb sharply again and quickly wipe out the tax cuts that have been rolled out in Ireland.
