Government leaders agree cuts of 15c on petrol and 20c on diesel 

These excise measures will take effect from midnight on Wednesday, subject to a financial resolution being passed in the Dáil on Tuesday. File Picture: Eamonn Farrell/RollingNews

Prices at the pumps will be cut by between 15c and 20c until the end of May as the Government moves to tackle soaring costs for motorists and hauliers.

The cuts are due to come in from Wednesday after Taoiseach Micheál Martin, Tánaiste Simon Harris, and minister of state Sean Canney agreed to respond to the rising prices caused by the US and Israeli war on Iran.

It is expected that the total cost of the package of measures to be announced is in the range of €235m to €250m.

The Tánaiste will bring forward proposals to Tuesday's Cabinet meeting to cut excise duty on diesel by 20c per litre and excise duty on petrol by 15c until the end of May.

The National Oil Reserves Agency (Nora) levy will also be paused for two months, reducing it from 2c to zero.

The scrapping of the Nora levy will result in a cut of Government levies of 17c on petrol and 22c on diesel.

These measures will take effect, subject to a financial resolution being passed in the Dáil.

There will also be a diesel rebate scheme for hauliers and bus operators, which will be backdated.

It is understood that transport minister Darragh O’Brien secured “significant supports” for hauliers, coach operators, and motorists — with flexibility built into the response as the situation continues to evolve.

The reductions will benefit motorists, hauliers, transport operators, and those buying home heating oil.

It is also expected that there will be an extension of the fuel allowance season, which is due to end next week.

Meetings were held throughout Monday to discuss prospective measures, with senior ministers, including Darragh O’Brien, enterprise minister Peter Burke, social protection minister Dara Calleary, and public expenditure minister Jack Chambers, all in attendance.

The Taoiseach, Tánaiste, and Mr Canney met to finalise the package from 7pm onwards.

This will be rubberstamped by Cabinet on Tuesday morning and publicly announced afterwards.

While the excise cuts are due to be voted through the Dáil on Tuesday evening, so that they can be implemented from midnight, Kevin McPartlan of Fuels for Ireland has warned that consumers may not see an immediate decrease at the pumps despite the Government decision.

“Depending on the size of the forecourt, this fuel may remain in storage for hours or days,” he said.

“As a result, any reduction in excise duty will only be reflected in pump prices once stations begin selling fuel that has been delivered after the duty change has come into effect.”

Mr McPartlan said that those buying petrol or diesel at large or “high throughput” petrol stations may see the excise cuts resulting in price changes “within hours”.

Smaller petrol stations, which received deliveries less frequently, “may take several days before the reduced costs are passed through”.

Elsewhere, builders have said they are “seriously concerned” that the fuel crisis could harm the delivery of essential projects and the pipeline of work in the year ahead.

The Construction Industry Federation (CIF) warned of a deepening “wait-and-see” approach to public projects among its members.

“Fuel is a core driver of costs,” CIF chief executive Andrew Brownlee said.

“It underpins the manufacture and transport of construction materials and is a fundamental day-to-day business cost.”

Cork-based developer Michael O’Flynn said that every developer in the country was seeing their costs rise.

“It’s inevitable, because we are so dependent on transport,” Mr O’Flynn said.

Asked if this could lead to a slowdown of housing development, he said it will add uncertainty, which leads to delays.

Oil prices fell on Monday following US president Donald Trump’s confirmation that threatened US strikes on Iranian power plants had been postponed for five days, after what he described as “very good and productive conversations” with Iran.

However, Mohammad-Baghar Ghalibaf, speaker of the Iranian parliament, said “no negotiations have been held with the US”, branding it “fake news” and a bid to “manipulate the financial and oil markets”.