The Government is taking a step-by-step approach to fuel subsidies, Minister for Agriculture Martin Heydon has said, following confirmation that the planned reversal of excise duty fuel cuts in September and October will not go ahead.
Earlier, a government spokesperson said that the first two stages of the phased re-introduction of full excise duty fuel costs between 1 September and the start of December will be delayed.
In order to do so, the Dáil will be recalled for one day, next Friday, to agree to a financial resolution confirming the matter.
“The decision taken today by the Taoiseach and the Tánaiste and Minister Canney, which will be confirmed by the Dáil next week is to pause those reinstatements for the first of September and first of October due to the ongoing geopolitical instability in the Middle East and the knock-on impact that has on fuel prices here,” Minister Heydon told RTÉ’s Drivetime.
He said that the Government is aware of “the impact that the reinstatement of those levies would have had on consumers”, but denied that the decision was taken to stave off potential protests.
Mr Heydon said that the measures are costing the exchequer €100m per month, adding that no decision had been made to halt the next increase in the Carbon Tax.
In a statement, a spokesperson said that the Government “reserved the right” to adjust its response to the conflict in the Middle East as required, “with nothing ruled out”.
They said the approach they have taken up to now has been “one of the largest fiscal interventions” of any EU member state in responding to the crisis – interventions which “have kept inflation under control and provided relief at the pumps”.
While the initial reintroduction was to begin on 1 September, it said that in the intervening period “it is clear there has been a change in the global situation and as a consequence the cost of petrol and diesel for consumers”.
The Taoiseach, Tánaiste and Minister Seán Canney subsequently agreed that the planned increases “will not now go ahead”, with an incorporeal Government meeting taking place next week to agree next steps.
“Ultimately the greatest economic intervention we can see is de-escalation in the Middle East – and that is still the case.
“We will continue to be agile and rule nothing out.”
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‘The geopolitical situation is so uncertain’ – Canney
Minister of State at the Department of Transport Seán Canney said the Government’s decision was in line with its policy to keep fuel prices under review.
“We continue to review the situation, because the situation geopolitically is very unsure. And whilst we have supports in place, we had deadlines by which they would be reversed, but we said also that we would continue to review the situation as it developed,” he said.
Speaking on RTÉ’s News at One, he said that supports would be kept in place if needed.
“So that is why it’s very hard to say what will happen in September or October, because the geopolitical situation is so uncertain and so unstable. We don’t know,” he said.
Minister Canney denied suggestions that the decision to maintain the supports was out of fear of further protests.
On the proposed next phase of the Carbon Tax, the minister said “we are not changing anything at the moment”.
“We will continue to monitor the costs. We will continue to monitor what way the prices are going and decisions will be made based on what trajectory we see the cost of fuel going over the next couple of months,” he said.
Our political reporter Fiachra Ó Cionnaith reports from Leinster House
The decision came amid growing pressure over the Government’s initial plan to re-introduce full excise duty fuel costs between 1 September and the start of December.
Ongoing uncertainty abroad and protests at home led to the coalition agreeing in April to a cut of 32 cent on a litre of diesel and 27 cent on a litre of petrol.
Specifically, four stages of the phased return of full excise duty costs were due to take place:
- 1 September: 9 cent on a litre of petrol, 10 cent on a litre of diesel
- 1 October: 8 cent on a litre of petrol, 8 cent on a litre of diesel
- 1 November: 5 cent on a litre of petrol, 7 cent on a litre of diesel
- 1 December: 5 cent on a litre of petrol, 5 cent on a litre of diesel
In recent days doubts emerged within the Government over whether the existing plan would take place, with Fine Gael TD and Minister for Enterprise Peter Burke saying yesterday that all options remained up for discussion.
Earlier today, Sinn Féin’s finance spokesperson Pearse Doherty said the cuts in place on fuel excise duty should remain for “as long as they are necessary”, adding that they should only increase when international prices begin to fall.
Ball in Government’s court over whether there will be fuel protests – Doherty
“We’re looking for the Government to finally listen and to act, and the only way these increases can be stopped is a recall of the Dáil before 1 September for a financial resolution to be passed,” Mr Doherty had said.
“And finally, for the Government to say they’ve listened to people, they’re standing with them and they’re not going to make life harder at this point in time by increasing petrol and diesel.”
Asked on RTÉ’s Morning Ireland programme if he would support any potential fuel protests, Mr Doherty said “nobody wants to be involved in protests” adding however that he was “proud” to have stood with them in April.
He added the “ball was firmly in the Government’s court” in relation to whether there would be further protests.
“I don’t want to see them but I will stand with them if the Government refuses to listen and decide to push up the price of petrol and diesel. I believe it is unacceptable and I rightly believe there will be protests if that is the case,” he said.
His comments followed a letter from party leader Mary Lou McDonald to the Taoiseach requesting the Dáil be recalled early to address the issue.
The Irish Farmers’ Association has welcomed the Government move to delay the planned reversal of the excise duty cuts.
Speaking on RTÉ’s News at One programme, Francie Gorman said: “It is good news. And we’ve always made the point that, along with a reduction in the excise duty, the carbon tax issue was something that had to be addressed, that it was a tax on energy, and basically a tax on people in rural Ireland, when we have no other alternative, other than to use the energy source that we have currently.”
