The Government is to stall planned increases to fuel excise duty that were due to kick in at the start of next month.
The rises, part of a phased move to reinstate cuts to excise and the National Oil Reserves Agency levy introduced earlier in the year, will not go ahead on September 1st and October 1st, the Coalition said in a statement on Friday.
It noted that a “pathway to gradually restore rates to pre-reduction levels, starting from September 1st” had been set out in June, but it was “clear that in the intervening period there has been a change in the global situation and as a consequence the cost of petrol and diesel for consumers”.
The statement added that “the next steps” would be agreed next week.
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Minister of State at the Department of Transport Seán Canney said he expected the Dáil would be recalled for one day to seek approval for the decision. The House is due to be on its summer recess until September 16th.
Canney told RTÉ’s News at One he could not say what would happen in future regarding the issues, but, if necessary, fuel supports would be kept in place until there was “some levelling out and going back to normality” for prices, which have risen back towards €2 a litre this month.
In April, protests over a surge in the cost of fuel linked to the Iran war brought parts of the country to a standstill and resulted in the Government announcing a package worth about €750 million to support consumers and businesses.
The reductions amount to 32c on a litre of diesel and 27c for petrol. From September 1st, 9 cent was to be added to a litre of petrol and 10 cent to a litre of diesel. Further increases were planned for the start of October, November and December.
Asked about the cost to the State of deferring, Canney said it would depend on how long the reduction remained in place. He said he did not have numbers to hand but the sum involved would be pro rata to the previously announced €750 million figure.
He denied the introduction of the cuts was a “knee-jerk reaction” to the fuel protests, saying he and Minister for Transport Darragh O’Brien had been having discussions about supports prior to the demonstrations causing disruption.
Coalition backbenchers and members of the Opposition recently began to put pressure the Government to extend the excise cuts. There had been a shift in tone from senior Government figures in recent days. Minister for Finance and Tánaiste Simon Harris told his backbenchers all options were on the table and Minister for Enterprise Peter Burke on Thursday said a possible Dáil recall was under review.
Sinn Féin leader Mary Lou McDonald wrote to Taoiseach Micheál Martin on Thursday night demanding that he recall the Dáil next week so TDs could vote to delay the first stage of the planned duty restoration.
Fuels for Ireland welcomed the decision to stall the duty restoration, saying it “averts an immediate risk of pushing diesel prices above €2 per litre and triggering renewed fuel protests”.
“Today’s decision addresses the immediate problem, but it does not address the fundamental weakness in Ireland’s approach to fuel pricing,” the lobby group’s chief executive Kevin McPartlan said.
Labour finance spokesman Ged Nash said a Dáil recall “was as predictable as it was inevitable, with Government representatives more or less signalling this move with a change of tone in recent days”.
“It comes as no surprise and brings this sham fight to an early close,” he said. “Delaying excise duty restoration for a few weeks is all well and good, but in no way does it make up for Fianna Fáil and Fine Gael’s gaslighting of PAYE workers this year, choosing as they did in last year’s budget to instead use the tax space to favour the hospitality sector.”
