Excise Duty: A Fuel Price Issue Back in Focus for Irish Government

The Irish government has opted to extend current excise cost reductions on petrol and diesel until September 1, a move that will cost an additional €270 million. This decision aims to provide further relief amid ongoing concerns about fuel prices, following a wave of protests in April that saw hauliers and farmers blockading streets.

These reductions, amounting to 27 cents per litre for petrol and 32 cents for diesel, were originally set to expire on July 31. The extension means consumers will continue to benefit from these lower prices for another month. The government's initial response to the protests in April involved a €700 million support package, which included postponing excise duty increases until the end of July.

However, the reprieve is temporary. Starting in September, the government plans a phased re-introduction of the full excise duty on fuel. This gradual unwinding is scheduled to take place over the final months of the year, concluding by December. For petrol, this involves a series of increases: 9 cents per litre on September 1, followed by 8 cents on October 1, 5 cents on November 1, and a final 5 cents on December 1.

Diesel will see a similar phased increase, with a 10 cent per litre rise on September 1, an 8 cent increase on October 1, and a 7 cent increase on November 1. This approach is presented by Tánaiste Simon Harris as having "a number of benefits," suggesting it allows for a more managed transition back to pre-protest duty levels. The government appears to be navigating a delicate balance between addressing public anger over fuel costs and managing fiscal responsibilities.

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Phased unwinding as 'number of benefits'