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Silver cars parked in a line in a field at the National Ploughing Championships. Alamy Stock Photo
Analysispetrol pump pressures
The excise dilemma: Political flashpoints ahead as pressure mounts over reversing fuel supports
Unwinding excise supports has been described as ‘political madness’ this week – will the government halt them?
A POTENTIAL STORM is brewing for the government before work resumes in September, with a number of flashpoints in the political calendar that could spell trouble when it comes to the decision around fuel prices.
This week saw pressure mounting on the government to scrap the unwinding of the planned excise reliefs on petrol and diesel.
In April, the government increased temporary fuel excise cuts to 32c on a litre of diesel and 27c for petrol.
However, before the summer break, it announced that a phased reversal will kick in next month.
The government was no doubt hoping that the conflict in the Middle East would dissipate and that the oil markets would stabilise, however, instability remains.
Opposition TDs have hit out in recent days against the plans to unwind the supports, pointing to figures from AA Ireland which show the average cost of a litre of diesel has risen by 19 cent to €1.92 in the past month, with petrol rising by 9 cent per litre to €1.84 over the same period.
Independent TD for Tipperary, Mattie McGrath, has said that escalating fuel costs, the impending return of higher fuel excise duty in September, in addition to the uncertainty surrounding the future of the Fuel Support Scheme are now having a debilitating impact on virtually every aspect of public and commercial life.
‘Take to the streets again’
Aontú leader Peadar Tóibín said price rises at the pumps from next month must be stopped or “people will take to the streets again”.
Even those in government parties are acknowledging that if fuel prices don’t stabilise soon, then the brakes should be pulled on the plan to reverse fuel supports.
Government sources told The Journal that if fuel prices increase and hover in and around the €2 mark, then the government would find it difficult to press ahead with plans to reverse the excise supports.
It’s not just opposition TDs, the Road Haulage Association (IRHA) has called it “political madness” to unwind the supports now.
IRHA President Ger Hyland told RTÉ that there would not be further fuel protests this autumn, as long as the government continues its “working relationship” with the association.
Keeping the official organisations on side is vital for the government if it wants to avoid a repeat of the level of disruption seen during the fuel protests in April.
Politicians in Fianna Fáil and Fine Gael say they don’t sense that there is an appetite for fuel protesters to take to the streets again, but said the next move by the government will be very important.
One important date in the calendar is the Irish Road Haulage Association Annual Conference in Killarney in early September.
Thousands of hauliers and transport operators from across the country are expected to roll into Killarney for the two-day event.
Minister Transport Darragh O’Brien TD will address delegates, as will junior minister Sean Canney, but it will be interesting to see the reception given to former minister of state Michael Healy-Rae, who will also be addressing the conference.
Michael Healy Rae to address hauliers in Killarney
The Kerry TD resigned during the fuel protests despite being in the room negotiating the support package. He said he could not support the government in a motion of confidence and resigned. Since his resignation, more has emerged about tensions between his brother Danny at the time.
This year’s conference is described as “a watershed moment for the transport industry”, with Hyland cautioning the government over its plans to unwind fuel supports.
“Any decision to wind down fuel supports at this time would drive inflation and have a severe impact on households and families across the country who would see higher food, and transport costs – driving the cost of living crisis to unsustainable levels. Adding 30 cents back onto a litre of fuel will mean that many haulage businesses simply will not make it to Christmas,” he said.
The Ploughing Championships is another key event in the political calendar when it comes to this issue.
Taking place in Screggan in County Offaly on the day before the Dáil returns, it is Europe’s largest outdoor agricultural event. It will be filled to the brim with many of the key stakeholders who are unhappy with the government’s handling of rising fuel costs.
It could prove to be another flashpoint for this government, who might feel the wrath from some attendees if fuel costs rise again in September.
The Taoiseach already faced a confrontation from one fuel protester when he attended the Tullamore Agricultural Show last week. He will be eager not to face the same at the Ploughing Championships.
Government keeping their powder dry
What will the next move of the government be?
Earlier this month, Public Expenditure Minister Jack Chambers acknowledged that if fuel prices rise significantly into the autumn, the government would have to reconsider the planned incremental excise increases.
However, the minister said the current position, as it stands, is for the excise cuts to be unwound, starting in September.
“The price dynamics are highly volatile,” said the minister.
Chambers said the government will assess the fuel situation in September, stating “we’ll keep the wider position under review”.
“Clearly, if prices significantly rise, we will have to consider that in the autumn,” he added, but the current plan to unwind the excise cuts remains in place.
Watch, wait and see appears to be the policy for the summer.
However, September is an expensive time for families, with children returning to school. People will also be feeling the pinch as energy companies hike up their prices and there are also warnings that food prices could rise in the next few months.
If all that comes to pass, and the government presses on with increasing excise on petrol and diesel, the much publicised promises of tax cuts and a few extra Euros back in your pocket won’t cut it for the public.
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