Dáil Éireann debate -
Tuesday, 30 Apr 2024

Vol. 1053 No. 2

Petrol and Diesel Excise Rate Increases: Motion [Private Members]

Deputy Pearse Doherty

I move:

That Dáil Éireann:

notes that:

— AA Ireland's latest monthly Fuel Price Survey has reported a surge in petrol and diesel prices over the recent period;

— these are the highest prices reported in 2024, with almost a 13 cent increase in petrol and a 9 cent increase in diesel since January 2024; and

— fuel prices have risen by more than 30 per cent in the past three years;

acknowledges that, as of 1st April, the Government chose to increase the price of petrol and diesel for households despite the fact that many households continue to struggle under the cost-of-living crisis;

rejects the Government's plan to further increase fuel costs for workers and families twice more this year; and

mandates the Government to scrap its plans to increase the price of petrol and diesel on 1st August and yet again on 9th October, and reverse the increase that took place on 1st April.

For many workers and families across the State, the cost of living remains far too high. People expect the Government to have their back and to make every effort to reduce the cost of living, rather than increase it but that is exactly what this Government has done. It has increased the cost of living through hiking up petrol and diesel. It will continue to do so when it comes to the cost of running a car and for families getting from A to B.

Having hiked the price of petrol and diesel last month, with plans to hike them again in August and October, the Government's plan will, no doubt, heap further pressure on households. It should not go ahead. The Government increased the price of petrol by 4 cent per litre and the price of diesel by 3 cent per litre on 1 April. It is planning to do so again on 1 August and again, for the third time, on 9 October. All in all, these tax hikes will increase the price of petrol by 10 cent per litre and diesel by 8 cent per litre. Last week, the AA found that in April petrol and diesel prices hit their highest levels so far this year. Fuel prices have risen by more than 30% in the past three years and the tax hikes that the Government has already implemented, as well as some it has planned for later in the year, will push prices even further, with real fears that fuel could hit the €2 per litre mark this year unless the Government changes course.

Given the cost-of-living pressure that so many continue to endure, the Government needs to change course. That is what Sinn Féin is calling for it to do. We made it clear that this matter should be kept under review. At this time, the circumstances are not warranted to increase the pressure on motorists. What the Government should do at this difficult time is make life more affordable for people, not more expensive.

For many people, using a car is their only reliable means of transport. Whether it is for bringing the children to school, making a hospital appointment on time or getting to work, they simply have no other option in many communities. Studies by researchers and academics from UCD and Trinity College Dublin in 2021 found that the areas with the highest level of transport disadvantage and forced car ownership, where there was no viable alternative to the car, are in mostly rural and socially deprived areas. When fuel prices rise, they cannot use the bus or the train instead of the car because these options simply are not available. Instead, they bear the brunt of the higher prices and they are least able to bear them. That is the case in my home county of Donegal and elsewhere in the State. Increasing the price of petrol and diesel, as the Government has done and plans to do again, hits them disproportionately at a time when other prices are hitting them very hard.

Last week, Sinn Féin launched our survey to understand how fuel prices were impacting on workers and families. It has only been out in the field for a couple of days and over 2,400 people have responded. Over 70% have said rising fuel prices are impacting their ability to get to work or do other necessary activities a lot. One person said they have to cut other main essentials needed at home just to fill the tank to get to work. Another person said that as they live in a rural area, a car is a must for them, and they are not very mobile. The Government, they said, seems to punish the motorist in every way it can.

The Government's price-hiking plans will also have a disproportionate impact on businesses and filling stations in Border counties. As the Government continues to increase taxes on petrol and diesel, the gap in fuel prices between the North and South will continue to widen. The British Government recently announced an extension of its reduced rate of excise, which applies in the North, for a further 12 months. According to the consumer council in the North, the average petrol price was 17 cent per litre cheaper in the North compared with the South, and the Government plans to increase the price in the South two more times this year. The average diesel price was also cheaper and the gap, as I said, is going to continue to rise under the Government's plan, as excise duty rates increase further.

Consumers in counties Donegal, Louth, Monaghan and elsewhere will naturally bring their money and custom across the Border in search of cheaper fuel. We are hearing reports from filling stations in Border counties that they are seeing a significant drop in sales. This will continue unless the Government changes course and scraps these price hikes. Last year, Sinn Féin called for the reduced rates of excise to be extended into 2024. We were explicit, as the Minister knows because we stated many times to him personally and publicly, that the rates and price volatility needed to be kept under constant review and demanded an agile reproach. The extension of the duty rate reduction by the British Government is testament to this, which no one could have foreseen.

If the Minister for Finance is going to say that keeping these rates under review was the wrong approach, he should read his own amendment because that is what he committed to. Instead of reviewing this situation in March and postponing the price hikes, as should have happened, he pushed ahead with them. He should not go ahead with the hikes in August or October. Sinn Féin is calling for the Government to show a flexible and common-sense approach to give workers, families and motorists a break in the middle of a cost-of-living crisis in which so many are still feeling the pressure. I call on every Deputy in the Dáil to support our motion to scrap the price hikes on petrol and diesel.

Deputy Martin Kenny

We have brought to the Minister a motion to ensure a level of fairness for people who are suffering the huge impact of the cost-of-living crisis, in particular, people living in rural areas who have to travel to work and often have long distances to travel because they have no other option. People are being burdened with increasing fuel prices. The two increases to come this year will push prices up well above what they are now.

As the Minister knows, I live in a Border region. For many years, when I was a youngster, people went to the North every week to get fuel and fill their car. When they were there, they also bought their bags of coal and other goods and brought them back across the Border. That was common in every community in the Border region. We do not want to go back to that situation again.

Filling stations in towns along the Border were closed for almost two decades because there was nobody shopping in them. Those towns were desolate. The Minister needs to take responsibility and recognise that while we are very fortunate at the moment that the Exchequer is booming, it is certainly not a boom that ordinary people and workers are feeling.

The Government can afford to leave this as it is for now and not bring in these increases. In fact, it could reverse the increases from earlier this year. We call on it to do so to ensure fair play for people who are working hard and doing everything they possibly can but find it very difficult to survive and manage, particularly as fuel prices continue to increase.

All the van drivers who make deliveries to shops and the commercial hauliers will also be affected by these increases. The Minister needs to recognise that they will have a huge impact on communities throughout the country but especially in the Border region. We do not want to the situation I described to come back again. As someone from a Border region who knows those communities, recognises the problems we had in the past and does not want to see them return, I plead with the Minister to reverse the hike from earlier in the year and postpone the two hikes he plans to bring in. We recognise the Government coffers are doing very well. There is no need to go ahead with this. Give the ordinary working people a break.

Deputy Louise O'Reilly

I thank my colleague, Deputy Doherty, for bringing forward this motion. Duty increases on petrol and diesel are a huge concern for my constituents in north County Dublin. We have debated the lack of a reliable bus service in this House many times. The Government has not provided people with a reliable bus service. They have no choice but to be in their car and they are getting creased yet again by this Government, not once or twice but three times this year. These increases in the face of a cost-of-living crisis for ordinary people and a cost-of-doing-business crisis for small businesses could not come at a worse time. For businesspeople, particularly the self-employed and sole traders, these increases will have a massive impact. Let us not forget that these increased fuel prices are coming on the back of an increase in the cost of road tolls. Ordinary workers and small businesses just cannot catch a break from this Government whatever way they turn. These price increases will impact on businesspeople and rural low-income households the hardest. The planned increases should be scrapped. I think the Minister knows that.

I also want to put on the record the frustration of many petrol station owners at the lack of a regulatory impact assessment or even a basic engagement with the sector before regulations were put in place for the European alternative fuels infrastructure directive. They feel they have been completely abandoned. No one is listening or talking to them. It is just another expense that they have to deal with.

Since it was announced, the increased cost of business scheme has been beset by delays, confusion and a fair degree of incompetence. The announcement, establishment and roll-out of the scheme picked up where the failed temporary business energy support scheme, TBESS, left off. The nature of the qualifying criteria and all associated with it has been opaque, which is why there has been a low take-up. Deputy Doherty alluded to a Sinn Féin survey. One SME responded to the survey stating it was a haulage company that transported fuel to various terminals and petrol stations throughout Ireland. Work, it stated, has reduced dramatically because of the price of fuel. It then states that if it does not change, it will close down the business.

The Minister should be under no illusions. What he does in here has very real consequences for business owners and their workers. Most workers and businesses are struggling just to get by. They do not need these price hikes. It is just one thing after another. That is what they tell me. They say the Government is not listening. It has an opportunity to listen now.

Deputy Darren O'Rourke

The planned increases on taxing fuel are not sensible or fair. Fuel prices have risen a staggering 30% over the past three years. If the Government proceeds with its proposals, these tax hikes will result in Irish households paying among the highest prices for fuel in Europe. Once again, Ireland is an outlier for all the wrong reasons and the Government has done absolutely nothing to get to grips with this situation. Now is not the time to heap more pressures on ordinary workers and families who have been absolutely crippled under the weight of the cost-of-living crisis. The Government’s punitive approach is completely out of touch. Once again, it has shown a complete lack of common sense and flexibility. It is only too happy to let certain groups suffer while others get off relatively easy. After all, we know these fuel price hikes will disproportionately hurt marginalised groups. As Deputy Doherty noted, research from TCD and UCD has shown that rural households, which are already at transport disadvantage, are more likely to be socioeconomically deprived and have the highest level of forced car ownership. The concept of transport poverty is a real thing and the Minister is adding to that burden with these measures.

The reality is that public transport links in rural Ireland are completely underfunded and underdeveloped. This Government has completely failed to treat them as a priority. In my home county, there is no rail service to Navan. There are two tolls on our motorways and the toll on the M3 is increasing. Therefore some of the areas most at risk of fuel price rises are hit hardest because people living in them have no choice but to use their cars. Instead of a just transition, rural low-income households are simply being left behind. The Minister has the opportunity to do the right thing tonight. I urge him and all other Deputies to do that.

Deputy Claire Kerrane

It is hard to fathom, when diesel and petrol prices are higher than they have been for years, when we have seen a 30% increase in costs in the last three years and when, since January, there has been a 13 cent per litre increase in the price of petrol and a 9 cent per litre increase in the price of diesel, that the Minister chose to increase that further on 1 April and to increase it again two more times this year. You could not find a better example of being out of touch. A Government awake to the real difficulties that workers and families are experiencing with the ongoing cost of living would not purposely increase these costs. In rural areas such as mine in Roscommon and Galway, and in many towns as well, people have to have a car. They cannot get anywhere without one.

Already, people typically pay high insurance and that is especially the case among young drivers. One young driver who contacted me recently will wait eight months for a driving test and has been quoted almost €3,500 insurance for the first year. That is before motor tax, and it is questionable what people get for motor tax given the state of many of our rural roads. That is before we talk about the rising running costs.

We then have the Minister for Transport, Deputy Eamon Ryan, encouraging us all to use public transport despite public transport in Roscommon and Galway being scrapped left, right and centre. Aircoach has recently pulled its service on the Galway to Dublin route, which served a number of towns in south Roscommon and east Galway and also served Portiuncula hospital in Ballinasloe. That decision followed Bus Éireann's earlier decision to pull its service on the same route. We have Local Link, which is a good but extremely limited service. In a number of villages in Roscommon, particularly in the south of the county, and east Galway people are looking for an expanded Local Link service but the organisation tells us it has no funding. People cannot access public transport and have no choice but to have a car, yet costs are increasing all the time, not only costs like insurance and motor costs but also those that the Government sets and which it is increasing on purpose. It is not good enough. It is not fair on rural communities. It is particularly unfair on young people starting out who are getting a driving licence for the first time and really struggling with these costs. The Minister is purposely making it more and more difficult, particularly for people in rural communities. I ask him to consider this motion and withdraw his amendment.

Deputy Pádraig Mac Lochlainn

The Minister will know that the worst affected sector of the economy since Brexit has been the fishing community. The losses have been devastating. It in not just the offshore sector. The National Inshore Fishermen’s Association has been before the joint committee and in the audiovisual room to make presentations on the serious crisis in the industry. Fishermen have repeatedly asked for support through a fuel subsidy. Governments in other EU member states have provided such subsidies. No state was more impacted by Brexit than Ireland and no fishing community was more impacted by it than the Irish one, yet we are one of the only member states that did not receive any financial subsidies for our sector. At meeting after meeting, organisations representing every part of the industry, whether producer organisations, inshore fishing organisations or island fishers, have been crying out for a fuel subsidy. They have raised it again and again but every time they do so, the Minister, Deputy McConalogue, talks about how his officials are monitoring the prices. They wilfully refuse to provide supports to our fishing community.

I have read the Bord Iascaigh Mhara and Bord Bia reports on the decline of the fishing industry. Speaking to fisherman all along the coast, there is profound anger.

They feel like they have been abandoned. They feel like there is no plan. I cannot understand why the Government continues to refuse to provide the necessary supports. When we talk about climate change and the forms of energy protection and so on that are required, I find it absolutely despicable that those in the inshore fishing sector and in island communities, who did not get any support through tie-up schemes or decommissioning offers, have received no fuel subsidies whatsoever. How many times do the inshore fishermen need to come into this House and beg for support? Recently they met the Minister; I understand some of them had to walk out of the meeting. There was nothing on the table in terms of financial support. I take the opportunity of this evening's debate to appeal directly to the Minister. I ask him to talk to the Minister for the marine, Deputy McConalogue, and ask him how on earth we cannot provide the supports necessary for inshore fishermen.

Deputy Johnny Guirke

Over the past few years we have witnessed a steep and relentless climb in fuel prices, a trend that has become a significant contributor to the deepening poverty among our people. It is a punishing reality that those who use the road to earn their living by car, van, tractor or lorry are met with the harsh penalty of soaring fuel costs amid an already crippling cost-of-living crisis. The repercussions of these escalating costs are felt throughout my constituency of Meath West and beyond. With the Government's decision in last October's budget to restore the higher excise duty on fuel to the level it was at before the temporary cut in 2022, fuel will now be hovering at a staggering €1.80 to €1.90 a litre. For families living in County Meath needing to run two cars, it is another hammer blow. Broadband, TV and mobile phone companies are also expected to increase the price of their services in the coming weeks.

Fuel, tech, energy, food, rent, entertainment, healthcare, etc., are all managing to syphon thousands of euro from hard-hit household budgets all over the country. That is not to mention mortgages where the annual cumulative impact of ten ECB interest rate increases since July 2022 could have added an eye-watering €5,000 per year for tracker mortgage holders, with fixed and variable mortgage holders suffering also - that is if people can actually afford to buy a house anywhere. Worst of all, the high cost of living in Ireland is forcing thousands to look beyond our shores and emigrate.

The Minister's acknowledgement of the hardship faced by households and businesses contrasts starkly with the Government's decision to permit successive fuel hikes. This in effect stands as a silent witness to the suffering of people bearing the brunt of the cost-of-living crisis. The latest monthly fuel price survey by AA Ireland paints a grim picture with a surge in petrol and diesel prices marking the highest figures of 2024 with increases of 13 cent for petrol and 9 cent for diesel since January alone. Over three years, fuel prices have increased by more than 30%. The prices of fuel, housing, rent, groceries and so on have soared under this Government, leaving many to rely on the help of charitable organisations or food hampers and vouchers. However, the necessity to fuel their vehicles is other financial burden as the daily routines of transporting children to schools, college and various other commitments must be done. The Government has failed to uphold the interest of the people we all pledged to represent.

Minister for Finance (Deputy Michael McGrath)

I move:

To delete all the words after "Dáil Éireann" and substitute the following:

"notes that:

— the volatility in fuel prices experienced now and over the last two years is due to a variety of geopolitical issues, including conflict in the Middle East and Ukraine, none of which the Government has control or influence over;

— crude oil is an internationally traded commodity, and its price is determined by changing global demand, and while the price of a barrel of oil has increased in recent weeks, prices are well below the highs of more than $110 a barrel experienced for much of 2022;

— figures published this week by the Central Statistics Office show that the annual rate of inflation fell to 1.6 per cent in April, the lowest rate of increase since mid-2021;

— within the above constraints, the Government has recognised the struggles many people and businesses have faced with increasing fuel prices, and has been very pro-active in responding to these fuel cost challenges over the last two years;

— in particular, the provision of temporary reductions in the rate of non-carbon Mineral Oil Tax applying to diesel, petrol and marked gas oil (MGO), which were due to be reversed in October 2023, but were further extended in Budget 2024;

— to date, the reductions are estimated to have cost over €1.2 billion in terms of revenue foregone since their implementation in March 2022;

— in their pre-Budget submission for 2024, Sinn Féin provided for a full restoration of excise from April 2024, meaning an increase of 8 cent, 6 cent, and 3.4 cent in a litre of petrol, diesel and MGO respectively earlier this month under the Sinn Féin proposals, instead of a two-step restoration proposed by the Government; and

— the cost in 2024 of the measures proposed in a previously published Sinn Féin motion is approximately €165 million, which has not been provided for in the party's budgetary proposals;

recalls that:

— in addition to its fuel excise reductions, the Government has made substantial fiscal support available to assist with the cost-of-living challenges amounting thus far to some €12 billion;

— Budget 2024 provided for €2.7 billion in once-off cost-of-living measures (net of windfall gains from the energy sector) which included;

— extending the 9 per cent Value Added Tax rate for gas and electricity to 31st October, 2024;

— extending the reduced rate of excise levied on fuels;

— three €150 electricity credits; and

— €1.1 billion in social welfare and other expenditure measures;

— this approach to the cost-of-living challenge balances the need to provide the necessary fiscal support to households and firms while, at the same time, avoiding a situation whereby the Government's fiscal response becomes part of the inflation problem;

— the policy response has been focussed on measures that are temporary, timely and targeted at those most in need; and

— Government has also been conscious of rising borrowing costs as well as the need to preserve price signals, in other words, the need to avoid interfering with the transition to carbon-neutrality;

recognises that:

— carbon tax is a key pillar underpinning the Government's Climate Action Plan 2024, to halve emissions by 2030, and reach net-zero no later than 2050;

— the Programme for Government: Our Shared Future committed to increasing carbon tax and the Finance Act 2020 provides for a 10-year trajectory for carbon tax increases to reach €100 per tonne of CO2 by 2030;

— a significant portion of carbon tax revenue is allocated for expenditure on targeted welfare measures and energy efficiency measures, which not only support the most vulnerable households in society but also in the long-term, provide support against fuel price impacts by reducing our reliance on fossil fuels;

— analysis, undertaken using SWITCH, the ESRI tax and benefit model, to simulate the impact of the carbon tax increase and the compensatory welfare package, has confirmed that the net impact of the combined measures is progressive, and households in the bottom four income deciles will see all of the cost of the carbon tax increase offset, with the bottom three deciles being better off as a result of these measures; and

— in the long run the best way to protect Ireland from the impact of international fossil fuel prices is to reduce our dependence on them, and we will achieve this through the progressive decarbonisation of the Irish economy and society, and through the steps that will be taken to meet the Government's commitment to reach net-zero greenhouse gas emissions by 2050; and

further recognises that:

— the Minister for Finance will continue to monitor and review the position in the coming months in the context of the final phase of excise rate restorations due to take place in August 2024; and

— Budget 2025 is the appropriate time for the Government to set out its taxation and expenditure decisions in response to the cost-of-living pressures currently being faced by many households.".

I welcome the opportunity to set out the Government's response to the Sinn Féin Private Members’ motion. The Government is acutely aware of the impacts of energy price inflation and the broader cost-of-living crisis on households and business across Ireland, and has acted decisively to lessen the financial impacts across the economy and society as a whole. The drivers of inflation are global in nature and, accordingly, it is not possible for any one government to fully absorb the costs. Therefore, Government policy has focused on temporary and targeted measures, aimed at the most vulnerable. The policy response has also been designed to avoid generating second round effects that could lead to an inflationary spiral.

It is important to set out the context of the wider inflation situation at the moment. Consumer price inflation has been a challenging headwind in recent years, averaging more than 8% in 2022 and more than 5.2% last year. Since then, wholesale energy prices have declined substantially and the process of disinflation is now thankfully well advanced, with both energy and non-energy inflation declining significantly over recent months. Inflation in April, as measured by the flash estimate of HICP, the harmonised EU-wide measure, stands at 1.6% which is the lowest since June 2021 and almost 5 percentage points down on April last year. Energy prices were down over 6% year-on-year in April and have fallen by 15% since the peak in November 2022, and, therefore, while I acknowledge we have been through a difficult time with inflation, the figures I have just outlined show an improving position.

It is important to note that the final retail price of fuel is determined by a number of factors, including the costs of production, distribution, global market factors, international exchange rates, taxation, wholesale market contracts as well as individual retail pricing policies. The price of a barrel of oil has increased in recent weeks to an average of approximately $88 so far this month, compared with $84 in March, $81 in February and $79 in January. These values are still well below the highs of more than $110 a barrel experienced for much of 2022.

Looking forward, future markets, upon which the price at the pump depends, expect oil prices to decline slowly but steadily over the forecast horizon. By the end of this year, the price of a barrel of oil is expected to be approximately $82, $77 by the end of 2025 and $74 by the end of 2026, but of course there are no guarantees. However, as has been clear from recent volatility, there is considerable uncertainty associated with the future path of energy prices and there is a possibility for future prices to diverge significantly from what is anticipated by the markets at present.

The Government is very aware of the severity of the financial impact that fuel price increases have on Irish households and businesses. I will shortly outline how we have responded to lessen the financial burden being faced by society. It is clear, however, that many of the factors influencing the current price of fuels are out of the Government’s control, in particular the market volatility.

Let me now turn to the Government’s response to the increase in energy prices over the past couple of years. Notwithstanding the restrictions of the energy tax directive and the need to manage the public finances, the Government has acted decisively on the energy crisis. We have recognised the impacts of fuel price increases. While these trends are driven primarily by global factors, the Government made the decision to alleviate some of these impacts through the domestic taxation of fuel. In particular, as colleagues have acknowledged, in March 2022, the Government provided for temporary reductions in the rate of non-carbon excise applying to diesel, petrol and marked gas oil, MGO. Following extensions and amendments, cumulatively these reductions amounted to 21 cent, 16 cent and 5.4 cent per litre for petrol, diesel and MGO, respectively.

These temporary reductions were initially due to end on 31 August 2022, but following review and monitoring of fuel prices they were extended until February 2023 with a phased restoration beginning in June 2023, followed by a second restoration in September 2023. A final restoration of excise rates was due to take place at the end of October 2023 but in the budget, I provided for a further extension until 31 March this year with a phased restoration occurring in two stages, on 1 April 2024 and 1 August 2024. The first stage of this final restoration came into effect at the beginning of this month. Inclusive of VAT, the excise on petrol, auto-diesel and MGO increased by 4 cent, 3 cent and 1.7 cent per litre, respectively. The amounts due as part of the final restoration scheduled for 1 August 2024 are of the same order.

The excise reductions to date are designed to strike the balance between passing a significant benefit to consumers while managing the tax base and respecting the minimum rates allowable under the energy tax directive. They are estimated to have cost more than €1.2 billion in revenue foregone to the Exchequer from their implementation in March 2022 to date.

I would like the House to note that as I outlined our plan to restore excise duty on budget day, the stated position of Sinn Féin, the main Opposition party, according to its pre-budget submission, was to have full restoration in April 2024.

That proposal would have cost motorists an extra 8 cent and 6 cent per litre on the price of petrol and diesel. Perhaps, unsurprisingly, yet again, the party has changed its position. The cost this year of the measures proposed in the motion is approximately €165 million, which is not provided for in any of its pre-budgetary arithmetic. The Government has made substantial fiscal support available to assist with the cost-of-living challenges amounting thus far to €12 billion. Budget 2024 provided for €2.7 billion in once-off cost-of-living measures, net of windfall gains from the energy sector, which included extending the 9% VAT rate for gas and electricity to the end of October this year; extending the reduced rate of excise levied on fuels; three €150 electricity credits; and more than €1 billion in social welfare and other expenditure measures. The Government recognises that there continues to be upward pressure in fuel prices due to a variety of issues but we do not believe it is appropriate to respond to this by accepting the motion before the House. It is our view that budget 2025 is the appropriate place to set out taxation and expenditure decisions in response to the cost-of-living pressures being faced by many across the country. In addition, both my Department and I will continue to monitor fuel prices over the next number of months, as I have said publicly on a number of occasions, with a view to evaluating the position prior to the 1 August excise restoration that is planned. That examination will include consideration of the cross-Border issues that colleagues across the House have raised again today.

Deputies will be aware that the 2020 programme for Government committed to increasing the amount charged per tonne of CO2. emissions from fuels to €100 by 2030. The Government followed through on this commitment by introducing legislation in the Finance Act 2020 to provide for a ten-year trajectory for carbon tax increases to reach this target level. This measure is the key pillar underpinning our climate action plan to halve emissions by 2030 and reach net zero no later than 2050. A further key element of the Government’s carbon tax policy is the effect of hypothecation of revenues raised from these rate increases to fund important just transition measures. It is important to note that a significant portion of carbon tax revenue is allocated for expenditure on targeted welfare measures and energy efficiency measures, which not only support the most vulnerable households, but also in the long term will mitigate fuel price impacts by reducing our reliance on fossil fuels. In the long run, the best way to protect Ireland from the impact of international fossil fuel price changes, is to reduce our dependence on them. We will achieve this through progressive decarbonisation of our society and through the steps that will be taken to meet the Government’s commitment to reach net-zero greenhouse gas emissions by 2050.

For context, it must be noted that the annual increases in the carbon tax rates have a relatively small impact on energy prices. The budget 2024 change in carbon tax, which came into effect in October last year for auto fuels, added approximately 2 cent per litre in tax to petrol and diesel. The increase in rates for home heating fuels such as kerosene, gas and solid fuels, does not take effect until 1 May on an annual basis and this is to mitigate against impacts during the winter heating season. The May 2024 increase will add approximately €21.56 to a 1,000 l fill of kerosene and 20 cent to a 12.5 kg bale of briquettes. It is clear that carbon taxation is not the cause of current energy price inflation.

To conclude, the Government is very conscious of the negative impact that energy price increases are having on households around the country. Everybody in this House will be aware of the primary reason for these and I have given a commitment in the House today, and previously, that the Government will consider and evaluate in a careful and deliberate manner, the environment for excise restoration, the final stage of which is due on 1 August. I will take into account where we are in the weeks leading up to that and will report to the House at that point.

An Ceann Comhairle

We will now go to Deputy Mitchell who is sharing time with her colleagues Deputies Farrell, Crowe, Mythen and Ellis.

Deputy Denise Mitchell

The increase to the price of petrol and diesel is penalising ordinary workers and families. The average working family continues to struggle with the cost-of-living crisis, and while inflation has eased, the cost of basic necessities still remains sky-high. Fuel prices have risen by more than 30% in recent years and if all three of the Government's price hikes go ahead, the price of petrol will increase by 10 cent per litre and the price of diesel will go up by 8 cent. Recent research by academics in Trinity College Dublin and University College Dublin also pointed to particular disadvantage in rural areas given the poor access to decent public transport. Working people are being hammered by the cost of living. Are they expected to just sit back and take it? The Government seems adamant about putting people in an impossible position and it is squeezing them for every red cent. The Minister is completely out of touch with the reality people are facing on the ground and the hardship his policies are causing households. His amendment outlined the measures the Government has taken. While these measures were welcome, the reality is that it was a drop in the ocean in the general scheme of things. The fact remains that people are still struggling with a cost-of-living crisis. The Minister should see sense and reverse the hike in the fuel prices that was implemented on 1 April. He must also scrap any future hikes. The Government needs to do the right thing and protect businesses and households from the increasing cost of living and not contribute more to it.

Deputy Mairéad Farrell

If these price increases tell us absolutely anything about the Government, it is that it is completely and utterly tone deaf to the reality for people across this State. People are already struggling. The cost-of-living crisis is still here. People are facing huge challenges every day because of it. What is the Government's response to that? It increases the price of petrol and diesel, not once, not twice, but three times this year. How out of touch can the Government be? One person got in touch with me about the impact that this is having on them. They wrote:

I travel 100 km each way everyday for work. I can't get a job closer to home because the work and pay is just not available. My wages are the only income coming into the house due to an illness.

Every increase hits hard and makes us pay more and live less. It is getting to point of working 7am to 5pm 5 days a week plus 3 hours travelling per day. Just to keep the roof over our head and we are lucky to have that roof.

Working to live

Work life balance non-existing

Just keep getting hammered

That is the reality for that family but there are so many others that are in just that same position at this time. It would be one thing if the Government was actually providing alternatives for people so that they did not have to get into their cars and travel three hours every day. However, it is not. I will provide an example of that. We had the old 20X20 bus to Dublin Airport, which was axed a number of years ago by Bus Éireann. I raised it in this Chamber at the time and I said this would have a serious impact on people who would need to then commute in their cars instead. We were told then it was okay because there was the Aircoach. Of course, now the Aircoach service is being axed, which again means for students, for example, travelling from the likes of Ballinasloe to Maynooth, or somebody who is working in a different place cannot access that service and have to get into their cars. What is the Government doing at the same time? It is increasing the cost for them commuting. It just does not make sense. To be honest, it shows the Government does not have a clue what is going on in people's lives. Léiríonn sé sin ach go háirithe dóibh siúd atá ina gcónaí faoin tuath. Tá orthu dul sa charr agus taisteal ar bhóithre atá lochtach agus nach bhfuil infheistíocht cuí déanta iontu le fada an lá mar gheall ar an Rialtas seo agus an Rialtas roimhe sin. Caithfidh na daoine seo dul isteach sa charr agus taisteal agus beidh ardú ar an gcostas don taisteal sin mar gheall nach bhfuil na seirbhísí bus ar fáil nó nach bhfuil traenacha. Mar shampla, is ar éigin atá traenacha ar bith in iarthar na tíre. Chomh maith leis sin tá an Rialtas de shíor ag ardú an phraghais. Tá sé dochreidte.

Deputy Seán Crowe

I do not think anyone can legitimately stand up and say that the climate crisis is not one of the greatest threats we face but we cannot wrap up measures like this as some sort of action against climate change. It is just another tax hike on commuters and their families.

The public transport network has been expanded but it is still a long way from where it should be. The rail network is creaking at the seams and capacity cannot keep up with demand. The introduction of new rolling stock is far too onerous a process. A small number of towns across the State finally have a bus service but they are in their infancy, and it is just not good enough. All these measures mean that the carrot is woefully smaller than the stick. Fuel prices went up at the start of April, as we have heard, and we saw the M50 toll go up on New Year's Day. If that is someone's daily commute, that is €100 gone.

The Minister is choosing to pursue an agenda of higher fuel costs that will drive up the cost of a commute. Fuel prices have risen by 30% in the past three years. It is just not good enough. He is not doing enough. He needs to look at these fuel prices.

Deputy Johnny Mythen

As the Minister will be very much aware, people are battling with the cost of living, inflation, higher mortgage rates, higher rents and higher energy costs, while fuel prices have risen by 30% in the past three years. That is not including the further charges the Government will introduce. Tomorrow the Government will increase the price of fuel for households. It will do so again in less than four months in August, with a third increase on the cards for 9 October, and with the AA predicting the possibility of fuel prices reaching €2 a litre at the end of the summer. Small businesses will have to bear the burden of these increased excise taxes along with the recent increases in carbon taxes. The cost to households in percentage income terms will result in poorer households feeling the pinch far more than other sectors. We all know these increases will be passed on in some shape or form to the consumer, whether through extra delivery charges or the cost of production, adding to the cost of living.

In case the Minister is not aware, rural Ireland, of which I am a part, has a higher rate of car dependency than the rest of the country. There is no viable public transport in many small towns and villages in my county, Wexford. These increases will have a substantial financial impact on lower income families. No one is calling for taxes to be cut, but this is not the time to impose three fuel tax increases in April, August and October, as planned. Shops in rural communities, petrol stations and businesses along the Border counties will also face huge closure threats from the differences in fuel prices due to these imposed excise taxes.

In this motion we ask the Government to rethink and not go ahead with the two further increases in fuel taxes and to reverse the 1 April one as it will have a negative financial impact on local and rural communities in both the North and the South of Ireland.

Deputy Dessie Ellis

As many commuters have found to their cost, having to rely on public transport in Ireland, in Dublin in particular, is very challenging. A great number of people rely on public transport to get to their place of work, to university or to college. Often, however, they are faced with unpredictable delays, insufficient coverage, capacity issues and accessibility challenges for mothers with babies in prams or those with disabilities. In 2023, environmental campaign group Greenpeace ranked Dublin as the worst for public transport among 30 European capital cities. Most reliable surveys of Irish motorists show that they would be more likely to use public transport if there were substantial improvements in the issues I have outlined.

Too often, however, we have policies put in place and price rises such as the latest ones on petrol and diesel that cannot be absorbed by those whose purchasing decisions are not influenced by price. Most people struggle with increasingly costly household bills and are price-sensitive. However noble it is to restrict the use of cars, and I encourage greater use of public transport, the reality is that many people rely on their car, and with good reason. These fuel price hikes not only hurt the parent taking his or her child to school, the person going to work and the carer looking after an aged or infirm family member. These latest tax increases will add to the pressure on consumers already struggling with the cost of groceries, energy, insurance and so much more. The Government should suspend the imposition of these excise increases and give vulnerable households and those on low incomes a break in this cost-of-living crisis. As always, the people who suffer the most with such increases are economically vulnerable households. Such households are disproportionately affected by price hikes. Families need a respite from these escalating costs, and it looks like they will not get it from this Government.

Deputy Ged Nash

Labour fully supports the motion for several reasons. With the increases in fuel duty brought in on 1 April and those planned in August and October, the Government is wilfully piling straws on a straining camel's back as working people in this country continue to struggle with the cost of living. The wording of the motion gets it right: "the Government chose to increase the price of petrol and diesel". It did not need to do so but went ahead and did regardless, despite the impact on those who are struggling to make ends meet.

It was in that context that on budget night last October the Labour Party moved a motion to seek a deferral of the planned excise duty increases pushed on punters at the pumps at least until budget 2025, in October of this year. On the night of the most recent budget, the Minister, Deputy Ryan, who was taking that Government business, refused to accept the Labour Party amendment to the motion, and we have seen excise duties rise at the pumps on 1 April. It was cleverly dubbed "April Fuel's Day" by Pat Flanagan in the Sunday Mirror, and he was not wrong. That increase went ahead in April, and further increases are planned for August and October. I am making the case once again that all those price hikes should be deferred and reconsidered at least until the situation is reassessed in budget 2025, in October.

The Minister can lay the blame for price increases elsewhere in the economy at the door of so-called price shocks - we have heard that time and time again - brought on by war and destruction to supply lines, but these increases are different. These are being wilfully imposed by the Government when it does not need to do so. This is entirely a Government-imposed increase on hard-pressed consumers. The coffers are full, and high fuel prices, since late 2021, and certainly since the outbreak of the illegal war Russia is waging on Ukraine, have perversely managed to bolster the public finances through a VAT bonanza. We know that. Consumers are already getting stiffed at the checkout and by profiteering telecoms and energy companies. Although the Minister will say inflation and the cost of living are coming down, the reality is that, while the rate of increase may be slowing, the cost of living is still extremely high, especially for those working people on small or fixed incomes. His actions need to reflect that reality. In 2023, real household incomes grew by 3%, yet wages rose by 8.5%, the difference explained largely by price increases. The rate of increase in inflation, as I said, is falling, and there is a real onus now on the Government and regulators to be vigilant and to keep a watching brief on, for example, the big supermarket chains, utility companies that charge among the highest prices in the EU and telecoms companies to make sure consumers are getting a fairer deal.

Crucially, however, the Government also has a responsibility not to add to inflationary pressures. Increased fuel prices and transport costs will in time be reflected on our supermarket shelves sooner or later, and that will potentially start to drive inflation in the wrong direction again. If, however, the Minister is unmoved to change course on this issue for the benefit of hard-pressed consumers, perhaps at least he will spare a thought for the small business owners in Border counties such as mine who stand to be significant losers in the wake of these planned price hikes. They are on the losing side already. In Border counties such as Louth, small businesses depend on fuel sales. They are vital sources of local employment, especially in more remote and more rural parts of my constituency, such as north Louth. They are bracing themselves for price hikes that will result in fuel being significantly cheaper across the Border, and there is no end to this. They will have more. Recently, the British Government, as has been said, postponed a similar intention to raise taxes on motor fuels. That means that if Ireland goes ahead and increases prices in August, the cost of petrol and diesel will be much lower north of the Border, leading to a fuel drain in Border areas, decimating small fuel retail businesses in places in County Louth. Estimates from a local fuel retailer in my area suggest that petrol will be up to 18 cent a litre cheaper and diesel 8 cent a litre cheaper north of the Border after the planned August increase. For fuel stations, which are important employers of local people, the results of this variance in price will be devastating.

Those of us who represent Border communities know that Border-based business are used to dealing with currency differentials and they deal with the swings and roundabouts of that. They have a good year or two and then will maybe have a bad year or two. Those are the swings and roundabouts of operating a business and being an employer in Border areas but these are Government-imposed increases and something can be done about it. Those who choose to seek their fuel across the Border are likely to do their shopping while they are there, resulting in an additional knock-on effect in Border shops and supermarkets. That is a familiar thing to businesses along the Border and is an experience we have all had over the years in my own county of Louth. The Irish Petrol Retailers Association fears that Border stations will close and jobs will be lost if these fuel increases go ahead as planned in August. I therefore urge the Government to take a second look at these planned duty increases and at the very least hit the pause button for now in order that small businesses in Border regions do not suffer because of an unfair advantage this Government will be willfully handing to their cross-Border competitors. Consumers need a break from the constant rise in the cost of living and the Government has the ability to deliver that by changing course on these planned hikes. As I proposed at budget time, let us put a freeze on these excise duty increases at least for now, and give workers a rest from pumped up prices.

Deputy Róisín Shortall

I thank Sinn Féin for tabling this motion and providing us an opportunity to debate the cost of fuel. There is no doubt but the high price of petrol and diesel has had a huge impact on workers and families across the country, in particular in rural Ireland. That is why interventions like excise duty cuts have been required. After two years it is surely time for the Government to outline its plan for the future because market volatility and price uncertainty look like they are here to stay. However, it seems that short-term measures are all that we can expect between now and election time. I see little vision for the future in the Government's energy policy or for that matter from anywhere else. Where are the solutions to what looks like at least a medium if not a long-term problem? This motion unfortunately contains no measures to reduce our reliance on oil or the number of cars on our roads. It certainly does nothing to address our exposure to the geopolitical events which fuel these price hikes. Of course, not only should the Opposition be doing that but the Government should principally be setting out such a plan. If this motion is passed, Ireland will still be at the mercy of international oil markets and events outside of our control. Why is that? It is because Ireland imports 100% of its oil and more than 50 million barrels of that oil is used each year to fuel our cars, trucks and buses. Excise duty cuts may provide a temporary cushion but more ambitious policy proposals are undoubtedly required. We should be treating the causes and not just the symptoms of this problem.

Radically reducing this country's reliance on oil should be a top priority, especially in an era of increasing global conflict and violence. This grim reality must be part of the debate because geopolitics plays a major role in price movements as we know. In December 2023, the International Institute for Strategic Studies published its annual armed conflict report. It documented 183 active conflicts across the globe, the highest number in three decades. We increasingly find ourselves living in a world of bitter divisions and warring parties in which the human and economic costs of war are growing. If we are to begin addressing the human costs, the international community needs to step up its efforts to forge peace and save innocent lives. In particular, the response of the EU to Israel's actions in Gaza has exposed a huge breakdown in political and moral leadership that cannot be excused under any circumstances. While in respect of the economics of all of this, the costs of conflict clearly are felt most severely and devastatingly by the regions under attack they are also, to a lesser degree, rippling around the world. This was brought into sharp focus after Russia's invasion of Ukraine, which led to war profiteering and record oil prices. The events unfolding in the Middle East are also a major factor in the prices we pay at the pumps.

Dr. Paul Deane, senior lecturer in UCC's environmental research institute, has written extensively about Ireland's exposure to the complexities of international oil markets and the important role of geopolitics in domestic prices. His message is simple. We must reduce our reliance on oil and other fossil fuels as otherwise, we will continue to find ourselves reacting to international events instead of responding in a thought-through manner. A strategy whereby we just wait for the next crisis to occur is not strategy at all. We need a paradigm shift in energy policy. There needs to be an acceptance that we all need to move to much more frequent use of public transport and, where appropriate, we need to see much higher levels of cycling and walking. This is necessary if we are to reduce our reliance on oil and meet our climate targets. This kind of behavioural change needs to be facilitated and supported by the Government because we should not be fooling ourselves. It is a tough ask to achieve the kind of modal shift that is so important. Irish people are heavily reliant on their cars. In 2022, the SEAI found that private cars in Ireland travelled more than 35 billion km. By any measure that is an eye-watering figure. Research by UCC has also shown that twice as many children are now dropped to their primary school gates by car than are walking or cycling when compared with 30 years ago. This is a deeply regrettable change in behaviour but it is not surprising given the poor provision of walking and cycling infrastructure in our cities, towns and villages.

Walking or cycling to school are simply not safe options for many children. However, if we are to reduce our transport emissions by 50% by the end of the decade, which we are required to do and as is set out in the climate action plan, the necessary infrastructure must be urgently provided. Unfortunately, we know that transport emissions are going in the wrong direction with a 6% rise in 2022. In rural Ireland, the situation is particularly difficult. For many people in rural areas, a private car is their only option, making them especially vulnerable to price hikes. My party colleague, Deputy Whitmore, has long called for a special EV grant scheme for rural Ireland alongside enhanced public transport. This type of targeted support would make EVs a more viable and attractive option for many people in rural Ireland, especially those on low incomes. For too long the State has been subsidising wealthy motorists, mostly in urban areas, to buy luxury EVs. Instead of facilitating this huge transfer of wealth from taxpayers to high-income earners, the State should be targeting supports at rural motorists who do not have the means necessary to buy an EV. I acknowledge the Government has committed to reviewing its EV schemes but the deadline for that is, incredibly, 2026. That is just not good enough. The climate crisis is here, as we all know and should all recognise, and we are reaching a tipping point. Climate action cannot be put on the long finger. Were the Government committed to reducing the number of petrol and diesel cars on our roads, it would implement a targeted scheme now and not in two years' time. These are the types of measures within the gift of the Government to do now.

While I appreciate there are drivers of inflation that are beyond the Minister's control, he could reduce the cost of living by introducing more targeted schemes and, crucially, investing in our public services.

Even before the cost-of-living crisis, the costs of basic services were swallowing up people's incomes. In other comparable countries, basic services such as healthcare, transport, education and childcare are free or heavily subsidised. In Ireland, these costs are still far too high. This makes us one of the most expensive places in the world in which to live. That is why the Social Democrats believe that the budgetary focus should be on reducing the cost of important public services so that no one is driven into debt or poverty just to pay for the necessities. To do that and provide for sustainable investment in public services, the tax base, as the Minister has been advised on numerous occasions, must be broadened, not eroded.

Debate adjourned.