Fuel excise cuts likely to be extended and tapered off over coming months
Coalition leaders are considering plans on Tuesday to continue excise reductions on petrol and diesel, at least in part, beyond the July 31st deadline.
While final decisions have yet to be made, it is expected the reductions introduced following the fuel protests in April will be tapered off over the coming months, The Irish Times reports.
Ministers do not want to hit consumers with sudden increases in fuel costs, but officials say the recent reductions in oil prices, and consequent drops in forecourt prices, mean the rationale for the excise cuts no longer exists, the paper said.
Taoiseach Micheál Martin, Tánaiste and Finance Minister Simon Harris and Minister of State Seán Canney (on behalf of the Independent TDs in Government) are due to discuss the issue on Monday evening with senior officials before bringing recommendations to the Cabinet on Tuesday morning.
At present, the reductions in excise of 32 cent a litre on diesel and 27 cent for petrol are due to expire at the end of July.
Any change in that will require legislation to be passed through the Oireachtas before the summer recess, which begins on July 16th.
One person involved in the process told The Irish Times that the leaders would finalise the plans on Monday night and seek Cabinet approval on Tuesday, with legislation brought forward quickly.
Speaking to reporters on Friday, the Taoiseach said he was keen to avoid “any cliff edge” in relation to the excise cuts.
Harris offered a similar view in the Dáil on Thursday, signalling a possible tapering off to ensure no “immediate cliff-edge” at the end of July.
Economic as well as political caution is likely to colour the Government’s approach.
Department of Finance officials are understood to have pointed out that increasing the prices at the pumps would impact inflation, according to The Irish Times.
The department has estimated that the excise cuts have brought inflation levels down by 0.6 per cent.
It is likely that the reductions in excise, which reduced the price paid by consumers of fuel, would be gradually unwound in phases between now and the end of the year.
The unwinding process could begin on August 1st, though some voices are likely to argue it should begin later, perhaps on September 1st.
The Government is likely to seek to separate the process of restoring the excise cuts from the Budget, due in early October.
