Coalition leaders will consider plans on Tuesday to continue the reductions in excise on petrol and diesel, at least in part, beyond the July 31st deadline.
While final decisions have yet to be made, it is expected that the reductions introduced following the fuel protests in April will be tapered off over the coming months.
Ministers do not want to hit consumers with sudden increases in fuel costs, but officials say the reductions in the price of oil in recent weeks – and consequent drops in forecourt prices – mean the rationale for the excise cuts no longer exists.
Taoiseach Micheál Martin, Tánaiste and Minister for Finance Simon Harris and Minister of State Seán Canney (on behalf of the Independent TDs in Government) are due to discuss the issue on Monday evening with senior officials before bringing recommendations to the Cabinet on Tuesday morning.
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At present, the reductions in excise of 32 cent a litre on diesel and 27 cent for petrol are due to expire at the end of July. Any change in that will require legislation to be passed through the Oireachtas before the summer recess, which is due to begin on July 16th.
One person involved in the process said the leaders would finalise the plans on Monday night and seek Cabinet approval on Tuesday, with legislation brought forward quickly.
Speaking to reporters on Friday, the Taoiseach said he was keen to avoid “any cliff edge” in relation to the excise cuts, while Harris offered a similar view in the Dáil on Thursday, signalling a possible tapering off to ensure no “immediate cliff-edge” at the end of July.
Economic as well as political caution is likely to colour the Government’s approach. Department of Finance officials are understood to have pointed out that increasing the prices at the pumps would impact inflation. The department has estimated that the excise cuts have brought down the level of inflation by 0.6 per cent.
It is likely that the reductions in excise – which reduced the price paid by consumers of fuel – would be gradually unwound in phases between now and the end of the year. The unwinding process could begin on August 1st, though some voices are likely to argue it should begin later, perhaps on September 1st. The Government is likely to seek to separate the process of restoring the excise cuts from the Budget, due in early October.
[ Simon Harris indicates gradual rollback of fuel tax cuts to avoid ‘cliff-edge’Opens in new window ]
Cuts to excise were introduced in March this year as prices on garage forecourts surged in response to the outbreak of war in the Gulf, and augmented following nationwide fuel protests in April.
Meanwhile, environmental campaign group Friends of the Earth has accused the Government of “undermining democracy” by rushing two significant pieces of legislation through the Oireachtas.
The group said the decision to “guillotine” both the Strategic Gas Emergency Reserve Bill – which provides for LNG storage – and the Dublin Airport (Passenger Capacity) Bill through all stages of the Dáil represents “an extraordinary attempt to avoid proper parliamentary scrutiny of legislation that could lock Ireland into higher emissions for decades”.
Friends of the Earth Ireland chief executive Deirdre Duffy said it was “deeply concerning” that legislation with potentially enormous environmental, health and financial consequences was being allocated only a matter of hours for debate in the Dáil on Tuesday.
