The government has decided to postpone a planned increase in the fuel excise rate applied to petrol, diesel and marked gas oil (green diesel) until next year.
The temporary excise rate reductions, which were introduced last year in response to higher fuel prices caused by the war in Ukraine, had been due to expire on October 31.
However, as part of Budget 2024, which was announced today (Tuesday, October 10) by Minister for Finance Michael McGrath, the temporary excise rate reduction has been extended until March 31, 2024.
Half of the outstanding amounts of 8c on petrol, 6c on diesel and 3.4c on green diesel will be restored on April 1, 2024, with the balance restored on August 1, 2024.
“I am conscious that the price of petrol and diesel for motorists has increased in recent weeks, driven by volatility in international oil prices.
“I have therefore decided to defer the final tranche of fuel excise increases which were due to happen on October 31,” Minister McGrath told the Dáil.
Meanwhile, the minister for finance confirmed that the carbon tax will rise, as expected.
The rate per tonne of carbon dioxide emitted for petrol and diesel will increase from €48.50 to €56.00.
The minister said that this increase will be applied to diesel and petrol with effect from October 11, 2023, and to all other fuels with effect from May 1, 2024.
“All of the revenue raised from this increase in carbon tax will be used to ensure the most vulnerable are protected from unintended impacts of the tax increase, to part fund a socially progressive national retrofitting programme, and to encourage and support farmers in the green transition,” he said.
Fuel
In his address to the Dáil, Minister for Public Expenditure and Reform Paschal Donohoe said that “applying an appropriate price to the climate-harmful effects of carbon through the carbon tax remains an important measure as we work together to meet our climate goals”.
He announced that an additional €165 million of carbon tax revenues will be available in 2024 to support a just transition and address fuel poverty, bringing the total revenue from the tax available for investment to €788 million.
“An additional €32 million in carbon tax funding will be provided to the Department of Agriculture, Food and the Marine (DAFM) next year to support up to 50,000 farmers to improve biodiversity, climate, air and water quality outcomes,” Minister Donohoe said.
As part of the cost-of-living supports contained in Budget 2024, Minister Donohoe also announced that all households will receive three energy credits of €150 each to help with electricity bills over winter.
They will be provided in three instalments between the end of 2023 and April next year.
The government also extended the 9% reduced VAT rate for gas and electricity for another 12 months.
Recipients of the fuel allowance will be given a €300 lump sum payment in the last quarter of this year, while an additional €200 will also be paid this year to recipients of the Living Alone Allowance.