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Fuel Prices

Dáil Éireann Debate, Thursday - 4 November 2021

Thursday, 4 November 2021

Questions (250, 252)

Michael Healy-Rae

Question:

250. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a series of matters in relation to the increases in the cost of fuel (details supplied); and if he will make a statement on the matter. [53951/21]

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James O'Connor

Question:

252. Deputy James O'Connor asked the Minister for Finance the action he will take to reduce rising costs to bus companies due to the increase in fuel prices; and if he will make a statement on the matter. [53790/21]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 250 and 252 together.

The price of petrol and diesel is determined by a number of factors including taxation, the price of the raw materials, the prevailing exchange rates as well as the fact the different wholesalers can enter into forward contracts at different rates for the purchase of oil. The price of fuel on the forecourt is set by the individual retailer and would likely take into account the costs associated with the retail of the product such as those mentioned above together with the cost of having oil delivered.

The current spike in energy prices arises principally from the global recovery from the Covid-19 pandemic and is being witnessed across the European Union as well as many other regions.

For large scale diesel consumers such as those involved in the road haulage and public transport sectors, the Deputy will be aware that the Diesel Rebate Scheme was introduced by my predecessor in 2013. This Scheme offers a partial excise refund to qualifying operators based on the retail price of diesel. The scheme is designed to provide a level of support when the retail price of auto diesel is relatively high. The rebate kicks in when the price at the pumps goes above €1.23 per litre; increasing gradually to a maximum rebate of 7.5c when diesel reaches €1.43 per litre. In Budget 2020, I provided for a temporary enhancement to the scheme in light of the challenges arising from Brexit uncertainty facing the industry. This involved a doubling of the marginal rate of compensation at prices over €1.32 (VAT inclusive) up to the maximum repayment rate of 7.5 cents per litre. In recognition of the vital role that the haulage sector plays in the economy, I have maintained this enhancement to the scheme which offers more generous conditions to essential users. This measure is aimed at maintaining the competitiveness of the road haulage sector and minimising the impact for the sector and related businesses which rely on road haulage services. Passenger transport is also benefitted by this scheme which is available to passenger bus operators.

The Deputy may also wish to note that businesses that are registered for VAT may deduct the VAT charged to them on the purchase of business inputs, such as road diesel and other motoring costs.

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