Fuel industry boss says 'absolutely reckless' to reverse excise duty cuts

Vivienne Clarke

The chief executive of Fuels for Ireland, Kevin McPartland, has described as “absolutely reckless” any efforts to re-impose excise duty cuts.

“It is absolutely reckless to think that we would re-impose these excise duty cuts, re-impose the NORA levy, and then in addition to that, go forward with the carbon tax increase, which the government is committed to on budget night, and go forward with an increase in price which will be caused by changes to the Renewable Transport Fuel Obligation Scheme on the 1st of January, which all in all will add €0.35 plus per litre to the prices we are paying today, if all else remains equal,’ he told RTÉ radio’s Morning Ireland.

Reversing the excise duty cuts would not really impact his members, he said.

“To be perfectly frank, they really don't impact our members, because if we go back to the time in March where diesel was €2.20, we did not see any reduction in sales. The reality is that this is not a normal product.

“Economists will talk about price elasticity. If you increase the price, you reduce the demand. It just doesn't work with fuel, and the reason for that is because nobody decides whether they're going to use fuel based on the price, or very, very few people do.

“You don't decide whether you're going to drop the kids to school this morning, whether you're going to go to work. Businesses don't decide whether they're going to deliver their products to market based on the price of diesel. It is an essential, and it should be regarded as an essential.

“I don't think we're doing this the right way.

“When the minister first introduced the reduction in excise duty back in March, he said we need to move away from knee-jerk responses to oil crises. He's dead right. The problem is we are still dealing in knee-jerk responses to oil crises.

“We need a strategic review of all of the compliance costs, all of the taxation costs, that make us pay more for fuel in Ireland than almost anywhere else in Europe.”

McPartland called for the Government to have three priorities: a fair take on revenue from fuels, greater support for the transition to renewables, and for fuel to remain affordable for those who do not have other options.

“There are a number of really strange contradictions right now. If a haulage company decides that they're going to switch from using diesel to using 100 per cent biofuel, they will pay more tax, not less, for making the environmental choice.

“We need to look at those things.”