Dáil Éireann Debate, Wednesday - 16 January 2013
149. Deputy Jack Wall asked the Minister for Finance his views on correspondence (details supplied) regarding the price of diesel; the actions or plans he is proposing to address on the concerns expressed; and if he will make a statement on the matter. [1397/13]
View answer163. Deputy Éamon Ó Cuív asked the Minister for Finance if he intends to reduce the total tax take on marked diesel oil or to intorduce a rebate from the carbon tax for registered agricultural contractors; and if he will make a statement on the matter. [1489/13]
View answerI propose to take Questions Nos. 149 and 163 together.
Ireland, as with other countries, has experienced an increase in fuel prices. This increase is an international phenomenon. Fuel prices are driven by a number of factors including the price of oil on international markets, exchange rates, production costs and refining costs. The rise in oil prices over recent periods reflected additional factors such as geopolitical uncertainty in Northern Africa and the Middle East with potential supply disruptions. Tax rates were not the main driver with increasing fuel prices. However, fuels prices have receded in recent times from highs experienced last year.
The Exchequer yield from excise, as excise is set at a nominal amount, does not increase as the price of fuels increase. On the other hand, the yield from VAT per litre of fuel, as VAT is set as a percentage of the price, increases as the price of fuels increase.
Contractors using machinery in the course of farming work are entitled to use Marked Gas Oil (MGO). The current excise duty including the carbon charge on MGO is 10.23 cents per litre, this compares to 47.9 cents per litre in respect of auto-diesel. In terms of VAT, the reduced VAT rate of 13.5% applies to MGO and the standard VAT rate of 23% applies to auto-diesel. MGO is therefore taxed more favourably compared to auto-diesel. I will not be introducing a tax rebate for users of MGO.
