Cuts in excise must make ‘a difference at the pumps’, says Donohoe

Industry say public given ‘false impression’ that prices would reduce from midnight

Minister for Finance Paschal Donohoe has said he fully supports criticisms the Taoiseach made in relation to allegations of price-fixing at the petrol pumps.

Referring to the cuts in excise duties announced this week, he said “the Government has invested over €300 million of taxpayers money at a time of huge risk. We have to ensure that every cent of that makes a difference at the pumps.

“We all need to play our part in this extraordinary time and will work with the suppliers in the coming week to ensure we maintain security of supply and do all we can to ensure measures that (the price reductions) are implemented.”

The representative body for petrol stations and fuel providers had earlier accused the Government of “misleading” the public into believing that the price of fuel would drop as soon as excise duty cuts came into effect.

Excise reductions of 20 cent per litre of petrol and 15 cent for diesel came into effect after midnight on Wednesday as part of Government efforts to curb a sharp increase in fuel costs linked to the war in Ukraine.

Fuel providers received sharp criticism as prices for petrol and diesel failed to drop on Thursday.

Kevin McPartlan, chief executive of Fuels for Ireland, said it was "misleading" to suggest providers had been "engaged in any sort of profiteering".

In an email to Micheál Martin on Thursday, Mr McPartlan said he was "proud" of the efforts of fuel providers and petrol stations during this challenging period.

“These times are made even more challenging when misleading comments find their way into the public domain,” he wrote.

The industry representative said the Government had given the public the “false impression” that prices at the pump would reduce as soon as the excise cuts came into effect.

“This was simply never going to be the case, and was flagged in advance, given that excise has already been paid on supplies presently on forecourts,” he said.

“It has given people a false impression that prices would reduce immediately, which was impossible as excise on those supplies had already been paid,” he wrote.

The Competition and Consumer Protection Commission (CCPC) has been called on to investigate alleged price-gouging by fuel providers before the excise cuts came into effect, with Opposition and Government TDs criticising the increases.

The consumer watchdog has said there were “no legal barriers” to filling stations independently raising prices, and it required evidence of cartel behaviour before launching an investigation.

‘Morally reprehensible’

Ministers are to meet Mr McPartlan and executives from several fuel providers on Friday afternoon. It is expected the meeting will be attended by Minister for Public Expenditure Michael McGrath, Minister of State for Enterprise Robert Troy, and Minister of State for Retail Damien English.

Speaking at the Fianna Fáil parliamentary party meeting on Wednesday evening, Mr Martin said reported profiteering around rising fuel prices was “completely unacceptable,” and any exploitation of the war in Ukraine was “morally reprehensible”.

In his correspondence to Mr Martin afterwards, Mr McPartlan said the comments were of “great concern” and that the suggestions petrol stations were profiteering was “offensive”.

The industry would “continue to transact our business ethically and in an open and transparent fashion,” he said. It would also defend itself against “faulty assumptions as to our industry’s ethics of operation,” he said.

Minister for Foreign Affairs Simon Coveney on Friday said the Government would do everything in its power to assist society, particularly the vulnerable, with increasing fuel, bread and oil heating prices.

More than aware

In an interview on the Opinion Line on Cork’s 96FM, the Minister said he and the Coalition were conscious of soaring prices.

“We will respond to that as best we can. And that is why there were social welfare increases, there were fuel allowance increases, there was a living alone allowance increase, there was a tax package which was targeting low to middle income earners,” he said.

“I am not saying that is enough. What I am saying is that the Government is more than aware of the pressures people are under and is responding to that and will continue to respond to that.”

He said fuel costs were “a hugely political issue and I think companies will be under intense scrutiny.

“And so they should be at a time when price inflation is as high as it is at the moment. We are encouraging the industry to get prices down,” he said.