asked the Minister for Finance if there has been an increase in the rate of VAT on petroleum products; and, if so, how this will affect the price of diesel oil and other petroleum products for agricultural use.
Ceisteanna—Questions. Oral Answers. - VAT on Petroleum Products.
90.
Mr. Kenny
There has been no increase in the rate of VAT applicable to petroleum products.
However, as a result of the revision of the VAT rates, already announced in the budget, which will take place consequent on the removal of VAT from foodstuffs and from oral medicines as from 3rd September next, the rate applicable to petroleum products will be increased from 5.26 per cent to 6.75 per cent as from that date.
The effect on farmers' costs of the VAT changes will be neutralised by the extension of the zero rate to cover all animal feeding stuffs and animal oral medicines used in agriculture as well as seeds and plants for the production of food.
The Parliamentary Secretary is evading the vital point, in view of certain statements that have been made: what will be the effect on the retail price of diesel oil and petrols as a result of the increase in VAT in September?
Mr. Kenny
I have not got that information.
If the tax element in certain prices is going up, surely the price to the consumer must go up as well, and that is the whole purpose of this question. Surely that is in the Parliamentary Secretary's brief somewhere.
Mr. Kenny
That is just a natural consequence. Every time there is an increase on the retailer it must be passed on to the consumer. It is a natural increase that will result from a rise in the price.
I am very glad the Parliamentary Secretary said that, in view of the fact that the Minister for Finance said there would be no increase in these fuels.
Mr. Kenny
I said it is only a natural consequence.
The Minister said there would be none. The Parliamentary Secretary admitted there will be.
Mr. Kenny
I did not say anything like that.
Next week I shall have to put down a question as to how much.
Mr. Kenny
Yes. Let the Deputy ask what will be the increase in the retail price.