Fuel tax cuts won't be fully reversed until after Budget, Coalition leaders decide

Fuel tax cuts in Ireland will not be fully reversed until well after the upcoming Budget, following a decision by Coalition leaders. The reduced excise duties on petrol and diesel, initially set to expire at the end of July, will now remain at their current levels until September 1st.

Instead of an abrupt end, the levies will be gradually unwound over a four-month period. While the exact increments are still to be determined, an initial step on September 1st is expected to add 9 cents per liter to diesel and 10 cents to petrol. This phased approach aims to avoid a "cliff-edge" for consumers and businesses, as stated by Taoiseach Micheál Martin and Tánaiste Simon Harris.

The government argues that this gradual restoration will protect families and help suppress inflation, despite the significant cost. Extending the lower excise level, first introduced in March following fuel protests, is expected to cost an additional €276 million. This brings the total government spending on cost-of-living and sectoral supports since the conflict in the Middle East began to approximately €1 billion.

Despite the decision to extend the cuts, the Coalition government anticipates political pressure. The gradual tapering approach offers flexibility, allowing the government to adjust if global oil prices fluctuate significantly. This strategy also aims to minimize the risk of renewed disruption, similar to the protests seen in April.

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there will be no “cliff-edge” to the end of the supports