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LAST UPDATE | 24 Mar
CUTS TO EXCISE duty on petrol and diesel will come into effect from midnight after the Dáil voted through the Government’s €250m package of emergency measures.
The measures, which are aimed at easing pressure on households and businesses as fuel prices surge amid the war in the Middle East, were unveiled by the coalition parties earlier today.
They were approved in the Dáil this evening, with TDs voting 118 in favour to 39 against, with Sinn Féin voting against because the party said the measures don’t go far enough.
Under the measures, excise duty on diesel will be cut by 20 cent per litre, while petrol will be reduced by 15 cent.
The package also includes support for hauliers and an extension of the fuel allowance, with ministers stressing the measures are designed to be temporary and targeted.
The National Oil Reserves Agency (NORA) levy of 2 cent per litre will also be suspended, bringing the effective reduction to 22 cent on diesel and 17 cent on petrol. Separate legislation will be required to enact the suspension.
On home heating, the fuel allowance payment for carers, pensioners and those with a disability will be extended by one month until the end of April, equating to an additional €152 per recipient.
And for hauliers and bus operators, a diesel rebate scheme has also been agreed, which will be backdated to January in an effort to keep supply chains functioning. The scheme will be kept in place until the end of June.
Announcing the plan today, Taoiseach Micheál Martin described the current situation as “a moment of great instability in the world”, saying the intervention is aimed at “cushioning the worst impacts of the price shock”.
“It is a targeted, temporary, affordable intervention aimed at protecting living standards and maintaining economic stability and competitiveness through temporary excise duty reduction, improvements to the diesel rebate scheme, helping a haulage sector that is vitally important to the smooth running of our entire economy,” Martin told a press conference this afternoon.
In response to earlier criticism that the package does little for those accessing home heating oil or heating their homes with gas, Martin said that the excise cuts will benefit all but that there are “limits to what Government can do”.
“We’re very conscious of the volatility around this,” he said, adding that the Government is “retaining a degree of flexibility” given the uncertain outlook.
He added that the Government is “not contemplating rationing” fuel at this stage, though he did not rule out possible work-from-home recommendations as well as possible speed reductions on roads.
Allowing staff to work from home where possible has been recommended by ESRI senior research officer Muireann Lynch and the International Energy Agency (IEA) to reduce the impact of oil price pressures on consumers.
Both Lynch and the IEA also recommended reducing motor speeds on roads to help reduce fuel consumption.
Asked by The Journal why the Government doesn’t suggest or mandate such measures at this point, the Taoiseach both actions are being kept under review.
He added that many private companies already have a “degree of remote working” while in the public sector it is “quite significant”.
Meanwhile, Tánaiste and Finance Minister Simon Harris says in a “best case scenario we would see a swift resolution and the normalisation of energy supply in 2026″ but in a worst case scenario “this becomes a much more prolonged conflict with significant economic global consequences”.
“Mystic Meg and her descendants can’t predict where the world’s economy is going to be at the end of May,” he said earlier, referencing the decision to limit the measures to an initial period up to the end of that month.
Harris said the Government is preparing for a range of scenarios, from a relatively swift resolution of the conflict to a more prolonged period of disruption with significant global economic consequences.
The measures come amid ongoing disruption to global oil supplies, with shipping through the Strait of Hormuz, a key route for around 20% of global oil consumption, significantly reduced since the outbreak of the conflict.
That has led to sharp increases in the cost of petrol, diesel and home heating fuels, raising concerns about inflation and the wider cost of living.
Martin said this morning that ending the war is the most effective way to get the world economy back to “equilibrium”.
He said the advice from the European Central Bank has been for targeted, temporary measures from Governments in response to the crisis.
Meanwhile, Opposition parties have taken aim at the Government measures, with the issue dominating Leaders’ Questions in the Dáil today.
Sinn Féin, Labour and the Social Democrats all criticised the measures for not going far enough.
Sinn Féin leader Mary Lou McDonald said the “standout failure” was for households that rely on home heating oil.
“You have literally abandoned 750,000 households that rely on home heating oil. The price of a fill of home heating oil has doubled in a matter of weeks, so a measly cut of two cent a litre is an insult. It amounts only to a 20 Euro reduction on a fill that now cost around €1700 a tank,” she said.
However, a government spokesperson claimed it is “extraordinary that after weeks of calling for action to help with rising fuel costs, Sinn Féin actually voted against reducing excise duty on petrol and diesel from midnight tonight”.
“They were the only opposition party to vote down measures to reduce the price at the pumps for motorists in the Dáil this evening,” added the spokesperson.
“Sinn Féin is once again more interested in performative political stunts than providing real support for people faced with rising prices due to the ongoing geopolitical turmoil.”
Meanwhile, Labour leader Ivana Bacik urged the Taoiseach to decarbonise our economy and use this moment to give people are right to work from home.
She was also critical of the size of the package, which at €250m is three times less than what was provided to restaurants and cafes via a tax cut in this year’s Budget.
Elsewhere, Social Democrats TD Cian O’Callaghan said that there is “almost nothing in this package for those low-income households” who are reliant on home heating oil.
“The government seems to think that they don’t have to assist those people because we are now in March, but people must still heat their homes in spring and there are vulnerable people, all over the country, who cannot now afford to turn the heating on,” O’Callaghan said.
“While a cut to excise duty, to provide relief at the pumps, is welcome, there is so much more the government should be doing to target supports at those who are struggling the most.”
With reporting from David Mac Redmond and Andrew Walsh
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