Excise cuts on petrol and diesel could be extended into early spring and a continued lower carbon tax on home-heating oil is an “absolute consideration” as the Government finalises the budget, Minister for Public Expenditure Jack Chambers has said.
The Fianna Fáil Minister said the focus of the budget is to help people with the cost of living.
The Government brought in excise cuts on petrol and diesel earlier this year in response to the energy crisis caused by the Iran war and other global unrest.
At the end of August, the Government agreed to defer plans to increase excise again until November 1st, when it is due to begin rising in phases up to the end of February 2027.
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Meanwhile, a planned increase in carbon tax on home-heating oil, which was due to come in last May, was deferred to October 14th as part of the cost-of-living measures brought in by the Coalition.
An Irish Times/Ipsos B&A opinion poll published this week found the budget priority for 23 per cent of respondents was for the Government to “provide supports to help with the cost of energy/home heating bills”.
Another 12 per cent wanted excise cuts extended.
Chambers was asked about these findings during an interview on RTÉ Radio’s Today with David McCullagh programme.
He replied the cost of energy is “absolutely one of the priorities” when it comes to the budget.
Chambers said “in all of our discussions we’re saying how do we target the limited amount that’s available to help people.
“So that’s why we’re examining, for example, changes to the fuel allowance which helps the lower-income households in our country.”
He said the Government is also looking at “How can we give people certainty on petrol and diesel through the winter period and potentially a further extension of excise into the early spring.”
He added: “We know that home-heating oil is a specific issue for many families that have no alternative and that’s why we’re examining how we treat home heating oil in the context of the carbon tax.”
However, Chambers cautioned: “We cannot and we will not be able to chase every global price change and that’s why we’ve actually made one of the bigger interventions in Europe because we have the ability to do so because we’re running surpluses.
“But we need to ensure that we manage it and get the balance right on that.”
He said petrol and diesel prices are below many other European countries because of the changes made by the Government.
Asked about the possibility of a continued lower carbon tax rate on home-heating oil Chambers said: “That’s an absolute consideration and we have to finalise everything but we are looking at that.”
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He also said he supports carbon tax, saying it is providing a revenue stream for energy efficiency retrofitting for homes and to help people in fuel poverty.
“We have agreed temporary deferrals but I’m absolutely clear if there was a full annual deferral for example of the carbon tax that would impact the revenue available on some expenditure items.”
Put to him that temporary supports are difficult to unwind, he said the role of Government is “to make the case for why we have to have a tax base to do things and that includes the carbon tax”.
He said: “We’ve got an Opposition that’s extremely populist that wants us to massively ramp up spending, wants us to narrow our tax base.”
McCullagh suggested that the Opposition do not want to narrow the tax base but instead want to tax the rich.
Chambers replied, “they want to reduce certain levels of income tax” and also that the Opposition “want to tax our enterprise economy which is the backbone of why we have the ability and the agility to make the decisions that we’re making today”.
