Can Govt hold the line on restoration of excise on fuel?

The Government faces a dilemma as the September deadline approaches for restoring excise on fuel. Initially, the Government hoped the price shock at the pumps would have eased by the deadline, but instability in the Middle East and a long summer have worsened the situation. Smaller crop yields will lead to rising food prices, and the first of four hikes to petrol and diesel is set for September.

The Government had to temporarily cut excise to help motorists, hauliers, and farmers, but nationwide protests forced them to cancel further cuts by the end of July. The first increase will be 9 cents for petrol and 10 cents for diesel on September 1st, while the Dáil is on recess to minimize political scrutiny. Opposition parties and representative groups are demanding a postponement of the hikes.

The government's tax revenue has soared, collecting €328 million in VAT on diesel and petrol in the first five months of the year, with most collected in April and May due to the Iran war. While the government defends the revenue as part of a €1 billion support package, opposition parties accuse them of benefiting while customers bear the burden.

The government remains undecided on the issue but may revisit the timetable if prices stay high, with some ministers suggesting a delay until after the budget when they can announce income tax cuts.