Government under fire over soaring fuel prices

Public Expenditure Minister Michael McGrath said a price cap on fuel could lead to fuel shortages, queues at petrol stations, and cause more trouble for Ireland in the long run.

European “law may change” on fuel excise, Minister Eamon Ryan has said.

The reductions in excise duties on petrol and diesel announced on Wednesday morning do not go far enough, opposition parties have said, with further calls on the Government to cap the cost of fuel and home heating oil.

Excise on petrol will be reduced by 20c, while diesel is to go down by 15c. The Taoiseach travelled to France on Thursday and told his colleagues he is working with the EU Commission to see what flexibility can be achieved to ease the pressures on the cost of living, particularly in energy.

A tense debate in the Dáil followed remarks by Michael McGrath on local radio in Cork, where the public expenditure minister warned the government cannot insulate the public from the full effects of war and said that capping fuel prices wouldn't work.

Sinn Féin’s Pearse Doherty said the Irish public is struggling to make ends meet and criticised the government for not reducing the price of home heating oil.

“The government doesn’t seem to understand the pressure that workers and families are under, doesn't seem to understand that businesses and farmers are now being pushed to the pin of their collar because half measures simply doesn't cut it.” 

Minister for Transport Eamon Ryan hinted that although the government intervened, it is hamstrung by European legislation which could change.

“We did what we did within the European law and that was correct and the law may change,” he said during Leader’s Questions.

“The Taoiseach will be there today, in the European Council looking to see what more can we do, what further flexibilities what further protections and help, but we will always do it within European law."

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Mr Ryan said the tax on home heating fuel is a carbon tax, and the money is used to give the 100% grants to people's homes to help them cut their bills.

“That's the choice that we have to think about,” he said.

“We have to look at our means and other measures and we will efficiency measures as well as price reductions. We have to ultimately what nothing else, switch from foreign fuels to using our own.” 

Mr Ryan has received considerable criticism for telling people to drive slowly in order to save fuel during a Dáil debate on Wednesday, which he said: “was an answer to a straight question.” 

“We will look at whatever other measures we can do,” he said.

Meanwhile, Social Democrat co-leader Catherine Murphy has written to The Competition and Consumer Protection Commission in relation to the daily increases in the cost of transport and home heating fuels.

The letter, seen by the Irish Examiner notes the Kildare TD has “received dozens of emails from persons nationally stating that in their respective localities, forecourt garages are increasing their fuel prices a number of times throughout the day in unison.

“Cognisant of the CCPC’s general function to promote competition, consumer welfare and to investigate, enforce / encourage compliance with competition and consumer law in this State the Deputy is requesting that CCPC initiate an investigation in respect of potential price-fixing / cartelism by motor fuel suppliers in the wholesale and retail markets.”

Earlier, Michael McGrath said the Government can not insulate people from all the effects of the war in Ukraine, the public expenditure minister has warned.

He has also ruled out a price cap on fuel, describing it as a simplistic solution that could lead to fuel shortages, queues at petrol stations, and cause more trouble for Ireland in the long run.

He said if any company had been involved in price gouging, in collusion or in any anti-competitive practices around fuel prices, they should be dealt with by the Competition and Consumer Protection Commission.

Mr McGrath told Neil Prendeville on Cork’s RedFM on Thursday that the impact of the excise cut, which will cost in the region of €320m, will be reflected in the price at the pumps over the coming days.

“It would be higher in a few days if we hadn’t introduced the reduction in the excise,” he insisted.

He also said a cap on fuel prices just won’t work in an Irish context.

“Looking to impose a fixed price or a cap on a commodity that we do not own in Ireland, that we rely on imports entirely, will not work,” he said.

“If you put a cap on that price you will end up, in my view, with a shortage of supply and you will end up with queues at the petrol stations because there are many markets around the world that are looking for oil and oil-based products and they will pay the higher prices and if we’re not prepared to, then we will not get the supply.

“I do not believe that it will work, and I think it is a simplistic solution that will get us in a lot more problem.” 

He said he understood the problems people were facing in the context of rising fuel, energy, and potential food price increases, but he said the Government will not be able to insulate people from all the effects of the war in Ukraine.

“I understand the problems people are facing and we are not playing down how hard it is on people,” he said.

But he said the Government was still borrowing to run the country — a lot less than what was forecast a year or two ago, because of the strength of the economic recovery — but he said the Government must also ensure that it could fund the running of the country, and deal with other needs, such as delivering housing.