Fuel retailers have been warned to ensure cuts in taxes on petrol and diesel are quickly passed on to motorists after the Government unveiled a €250 million package of support for households and businesses impacted by soaring energy costs.
The warning came as the Dáil voted on Tuesday night by 118 votes to 39 for excise rates to be reduced by 15 cent per litre on petrol; 20 cent per litre on diesel; and 3 cent per litre on marked gas oil.
The House rejected by 88 to 69 a Sinn Féin amendment for the maximum excise cut possible on diesel and petrol and the removal of excise entirely from home heating oil.
The cuts on motor fuels come into effect from 12am on Wednesday until May 31st.
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The cost of fuel at the pumps soared to well over €2 per litre in the wake of the joint attack by the United States and Israel on Iran.
The fuel industry has denied price gouging in the immediate aftermath of the outbreak of war, but Taoiseach Micheál Martin and Tánaiste Simon Harris both set out their expectation that cuts in excise on petrol and diesel will be passed on rapidly to consumers.
During a Dáil debate on Tuesday evening, the Tánaiste said, “it’s very clear people were very quick to put up the prices. They need to pull them down as quickly.”
He also warned “the Government will be monitoring this extremely closely”.
Martin said if the cuts are not passed on, “that has implications and consequences as well, in terms of subsequent decisions that the Government might take”.
Changes to the National Oil Reserve Agency (Nora) levy will mean an effective cut in Government levies of an extra 2c each on diesel and petrol for a period of two months.
The Nora levy changes require primary legislation which will be pushed through the Oireachtas this week for implementation from April 1st.
During Tuesday night’s debate, the Tánaiste said the measures will be in place for a defined period of time because “we have to remain agile and flexible in relation to any set of measures”.
The “economic medicine today may not be the prescription required in the weeks and months ahead”, he said.
Later, a Government spokesperson criticised as “extraordinary” the decision by Sinn Féin to vote against “reducing excise duty on petrol and diesel from midnight tonight”, after weeks of calling for action to help with rising fuel costs. The Sinn Féin amendment to cut excise duty to the “maximum level” was rejected by 88 to 69 votes.
The Government claimed it was a “performative political stunt”.
Earlier, the Taoiseach staunchly defended the package of supports as he came under intense Opposition pressure on the matter.
The issue dominated leaders’ questions, with trenchant criticism that the €250 million step amounted to “half measures” and was “simply not enough”.
Sinn Féin leader Mary Lou McDonald claimed the Government has “literally abandoned” the 750,000 households relying on home heating oil and said the package “had to be dragged out of you”.
During a later debate, the party’s finance spokesman Pearse Doherty described the package as “a pathetic token gesture that doesn’t even come close to what is needed”.
Labour finance spokesman Ged Nash described it as “timid and anaemic”.
[ How much will petrol or diesel cost in Ireland from midnight?Opens in new window ]
Warning of different rates of reduction in prices, chief executive of industry lobby group Fuels for Ireland Kevin McPartlan said the pressure of rising fuel prices on households and businesses is “being driven by continued volatility in international energy markets”.
“Even where tax changes take effect instantly, their impact at the pump is not uniform”, as fuel currently on sale has been purchased in advance by the retailer at the higher rate of excise duty “and must first be sold through”.
He said many forecourts will receive new stock on Wednesday, and this will reflect the reduced rates, while a smaller number of sites with lower sales volumes and less frequent deliveries may take longer to adjust.
“Motorists should therefore expect to see price reductions emerge quickly across much of the network, but not necessarily at every forecourt immediately,” McPartlan added.
Separately, the Government announced relief for haulage and bus passenger operators in the form of an increase in the maximum repayment allowable under the Diesel Rebate Scheme, from 7.5 cent up to 12 cent per litre of diesel. This will apply to diesel purchased from January 1st until June 30th, 2026.
In the shadow of the war in Iran, inflation and energy costs look set to climb ever higher
Meanwhile, the fuel allowance season will be extended by an additional four weeks, which means the 470,000 households in receipt of the fuel allowance will receive additional financial support of €38 per week, totalling €152.
At Tuesday’s press conference, Harris pointed to this measure as he mentioned the pressures on households using home heating oil.
He said: “This provides very practical financial assistance to pensioners, to carers, to people with disabilities and to low-income working families.”
Martin added: “We are investing in the region of €250 million in cushioning the worst impacts of the price shock for those most exposed and those who are most vulnerable.”
He said: “All of the measures we’re introducing today are time-bound and subject to ongoing review based on market developments.”
He spoke of the importance of investment in renewable energy and energy storage and retrofitting for energy efficiency, and said: “It’s also a reminder to each of us of the value of energy conservation.”
He said the Government is “not contemplating” the rationing of fuel at this time.
On the issue of remote working, Martin said: “We’re keeping everything under review” but “there is a significant degree of remote working as it is and we’re not giving specific advice to businesses yet.”
