I move:
(1) THAT in this resolution–
Act of 1997 means the Finance Act, 1997 (No. 22 of 1997);
"Act of 1999" means the Finance Act, 1999 (No. 2 of 1999);
"Act of 2000" means the Finance Act, 2000 (No. 3 of 2000).
(2) THAT the rebate of duty on mineral hydrocarbon light oil provided for in section 56(3) of the Finance Act, 1988 (No. 12 of 1988) shall, as respects mineral hydrocarbon light oil on which it is shown to the satisfaction of the Revenue Commissioners that duty at the rate specified in section 89 (2) of the Finance Act, 1998 (No. 3 of 1998) has been paid on or after 7 December 2000, be calculated at the rate of £86.92 per 1,000 litres and Schedule 2 to the Act of 1999, as inserted by the Act of 2000, is amended by the substitution of "£274.44 per 1,000 litres" for "£294.44 per 1,000 litres" opposite the reference to Light Oil: Unleaded petrol.
(3) THAT the duty of excise on hydrocarbon oil imposed by paragraph 12(1) of the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975), shall, in lieu of the rate specified in section 82(5) of the Act of 1997, be charged, levied and paid, as on and from 7 December 2000 at the rate of £196.14 per 1,000 litres and Schedule 2 to the Act of 1999, as inserted by the Act of 2000, is amended by the substitution of "£196.14 per 1,000 litres" for "£256.14 per 1,000 litres" opposite the reference to Heavy Oil: Used as a propellant.
(4) THAT the duty of excise on substitute motor fuel imposed by section 116(2) of the Finance Act, 1995 (No. 8 of 1995), shall, in lieu of the rate specified in section 82(6) of the Act of 1997, be charged, levied and paid, as on and from 7 December 2000 at the rate of £196.14 per 1,000 litres and Schedule 2 to the Act of 1999, as inserted by the Act of 2000, is amended by the substitution of "£196.14 per 1,000 litres" for "£256.14 per 1,000 litres" opposite the reference to Substitute Fuel: Used as a propellant.
(5) IT is hereby declared that it is expedient in the public interest that this resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
This resolution provides for a reduction in the excise duty rate of 2p per litre on unleaded petrol which, when VAT is included, amounts to 2.42p per litre with effect from midnight and a reduction in the excise duty rate of 6p per litre on auto diesel which, when VAT is included, amounts to 7.26p per litre with effect from midnight. There is also an excise duty reduction on substitute motor fuel which, when VAT is included, amounts to 7.26p per litre with effect from midnight.
Provision is also made to reflect these reductions in the consolidated mineral oil tax legislation in the Finance Act, 1999. That legislation is not yet in operation. It will be commenced by ministerial order when the necessary secondary legislation and Revenue staff instructions are finalised.
It is expected that both these reduction measures will cost the Exchequer £8.4 million in 2000 and £162.3 million in a full year. The combined effect on the consumer price index – CPI – of these two measures will be a reduction of 0.2%.
An EU Council directive obliges member states to apply minimum rates of excise duty on mineral oils. The reduction in the auto diesel rate, which will bring the revised rate down to almost the agreed EU minimum level, will be of significant benefit to the road haulage sector as well as to other users of diesel such as coach tour operators.
The total tax take from these two commodities will reduce further on 1 January 2001 as a result of the proposed reduction in VAT from 21% to 20%. The overall tax reduction in the price of a litre of unleaded petrol will be 3.02p and in a litre of auto diesel it will be 7.81p per litre.
As stated in the Budget Statement by the Minister for Finance, the Government is anxious to encourage the use of low sulphur diesel for environmental reasons. While the proposed excise duty rate reduction of 6p per litre will apply to all diesel for the present, it is proposed that in the future this lower rate will apply to low sulphur diesel only. Such a differentiation in excise duty rates requires EU approval which will be sought in the very near future. The intervening period should allow oil companies to make provision for nationwide availability of this fuel and to allow transport operators sufficient time to make the switch to the cleaner more environmentally friendly fuel.