Some fuel price drops after diesel, petrol tax cuts

Fuel prices on forecourts have started to drop after the Government agreed to cut taxes on both diesel and petrol.

The move sees the excise duty on a litre of diesel reduce by 20 cent, with a 15 cent drop for petrol until the end of May.

Last night, the Dáil voted to approve the measures, which are part of a €235 million Government support package to offset soaring fuel prices due to the escalating conflict in the Middle East.

In addition, a two cent per litre levy on both fuels that goes to the National Oil Reserves Agency (NORA) is expected to be paused for two months from the start of April.

Before the Iran war started, pump prices for diesel and petrol were averaging around €1.70 per litre, but soaring oil prices have seen the cost of a litre of diesel hit €2.30 on many forecourts in recent days, with petrol hovering around €2 per litre.

The reductions kicked in at midnight, with fuel leaving a depot from then subject to the lower excise rates.

However, many service stations might be still selling existing stock - on which a higher excise duty was paid - meaning motorists will not be paying cheaper fuel prices at some pumps until old supplies wash through.

Though some forecourt retailers are reportedly dropping their pump prices before they get fresh deliveries to avoid criticism and allegations of price gouging.

The Irish Petrol Retailers Association (IPRA), which claims its members have been getting abuse over pricing, said fuel retailers have bought fuel over the past few days at the higher excise rate and that they will sell this stock at a loss.

The IPRA is asking the Government to issue a rebate of the excise duty on this fuel.

The Government measures also include a VAT-inclusive three cent per litre cut in excise on green diesel, and a temporary increase in the maximum rebate allowable under the Diesel Rebate Scheme (administered by Revenue) to 12 cent per litre (from 7.5 cent per litre) until 30 June.

Heating payments to social welfare recipients will be extended for four weeks, and there will be enhancements to a rebate programme for hauliers.

The overall package, which will also include targeted energy supports for pensioners, carers and people with disabilities, is set to cost €235m.

118 TDs backed the Financial Resolution with 39 opposing it.

Taoiseach Micheál Martin said the measures are "targeted and temporary" and will be reviewed subject to market developments.

Mr Martin was asked about the fact that motorists will still have to pay a lot more for their fuel even after the excise cuts are applied.

"There are limits to what governments can do in response to a crisis of this kind and we want to ensure what we do is sustainable," he said.

He said it is not known how long the war will last and the turbulence that goes with it in the energy markets.

Read more: How the Govt's excise cuts will impact the cost of fuels