FFI calls for review of fuel excise duties before changes are made to carbon tax

Government urged to review the full range of public-policy costs affecting fuel prices before deciding whether to slow the planned trajectory of carbon-tax increases

FFI CEO Kevin McPartlan said carbon tax has a 'clear emissions-reduction purpose', and before the Government 'changes its trajectory, it should examine the whole fuel-policy system, what each measure costs, what it delivers, and how the measures interact." File picture 

Fuels for Ireland (FFI) has called for a review of excise duties on fuel products before changing the trajectory of the carbon tax, which has “a clear emissions-reduction purpose”.

Finance minister Simon Harris last week hinted that the Government could pause carbon tax hikes in October, saying everything will be kept “under review”.

He said no decision on carbon tax increases has been taken, saying that the budget on October 6 will come in advance of planned hikes.

In a statement, FFI urged the Government to review the full range of public-policy costs affecting fuel prices before deciding whether to slow the planned trajectory of carbon-tax increases. It said that unlike other fuel taxes, carbon tax is “ringfenced to support climate action, including measures that help households reduce energy use and emissions.

“FFI believes this dedicated funding gives the carbon tax a particular strategic value. Any decision to alter its planned trajectory should therefore consider not only the immediate impact on fuel prices, but also the climate investment and emissions-reduction measures those revenues support.”

CEO of the group, Kevin McPartlan, said carbon tax has a “clear emissions-reduction purpose”, and before the Government “changes its trajectory, it should examine the whole fuel-policy system, what each measure costs, what it delivers, and how the measures interact."

“If Government believes the total burden on motorists, businesses, and households has become too high, it seems strange the next measure we might slow down is carbon tax without first examining everything else Government policy adds to the price of fuel. This is not an argument against lower fuel taxes. It is an argument for a smarter, long-term fuel-tax strategy.”

FFI is calling for an independent expert group to be established to examine the combined impact and effectiveness of the taxes, levies, obligations, and regulatory costs affecting transport and home-heating fuels.

“This is not a call for blanket tax cuts. It is a call for coherent policy that reduces emissions while balancing affordability, competitiveness, energy security, and the need for exchequer revenue,” Mr McPartlan said.