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Tax Code

Dáil Éireann Debate, Thursday - 28 April 2022

Thursday, 28 April 2022

Ceisteanna (6, 26, 61)

Jackie Cahill

Ceist:

6. Deputy Jackie Cahill asked the Minister for Finance if he intends to extend the timeframe for the reduction in excise duties on petrol, diesel and marked gas oil; and if he will make a statement on the matter. [20571/22]

Amharc ar fhreagra

Joe Flaherty

Ceist:

26. Deputy Joe Flaherty asked the Minister for Finance the estimated cost of the recent cuts to excise duties on petrol, diesel and marked gas oil; and if he will make a statement on the matter. [20524/22]

Amharc ar fhreagra

Barry Cowen

Ceist:

61. Deputy Barry Cowen asked the Minister for Finance if he has plans to further reduce excise duties on petrol and diesel; and if he will make a statement on the matter. [20522/22]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 6, 26 and 61 together.

The Government is very aware of the impact of rising fuel prices on households and businesses. These trends are driven primarily by global factors. The key drivers of this increase are increases in wholesale energy prices as a result of the rapid rebound in global demand, global supply chain disruptions and the imbalance between demand and supply that emerged as economies re-opened. More recently, as a result of the war in Ukraine, oil and gas prices have risen further. It is not possible for the Government to fully insulate consumers against these price impacts, however, a number of very significant steps have been taken to lessen the impact of increased fuel prices.

On fuel excise, a package of measures, to the value of €320 million, was introduced with effect from 10 March reducing the VAT inclusive excise duty on petrol, diesel and MGO by 20, 15 and 2 cent per litre respectively. These reductions mitigate the cost of a fill of a 60 litre tank by some €12 for petrol and €9 for diesel. This assists all transport users, rural and urban, including commuters, business and farmers. These measures are now being extended to 12 October 2022, with an additional 3 cent reduction for MGO. The extended measures will cost a further €97m.

Energy taxation in Ireland is governed by the Energy Taxation Directive, which sets out excise duty rules covering all energy products in the EU used for heating and transport, as well as electricity. The Directive sets out minimum levels of taxation applicable to these energy products for specific fuel uses. For diesel used as a propellant, the minimum rate is €330.00 per 1000 Litres exclusive of VAT. This equates to 33 cents per litre.

The March 9th (pre reduction) rate on MOT on diesel was 53.55 cent per litre. The subsequent reductions have brought the overall MOT rate to 40.54 cents per litre. The Diesel Rebate Scheme operates a price cap of 7.5 cent per litre bringing the effective rate of excise paid to 33.04 cents for those availing of the relief.

For this reason, it is not possible to reduce the rate on MOT on diesel by any more than 15 cents VAT inclusive.

Question No. 7 answered orally.
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