Varadkar hints final excise increase on petrol and diesel will not go ahead

Leo Varadkar also said the VAT rate of 9% for the hospitality sector is no longer justifiable

Speaking to reporters at the Fine Gael think-in in Limerick, Mr Varadkar said he wouldn’t like to see the final restoration of excise duty due at the end of October to drive prices back up to €2 again. File photo: Leah Farrell / © RollingNews.ie

Taoiseach Leo Varadkar has strongly indicated that the final increase of excise duty on fuel will not go ahead.

He also said a number of one-off payments announced in next month’s Budget will fall in this calendar year but warned that they won’t be “on the same scale” as last year’s Budget.

He said: “Bear in mind since last year, inflation has started to moderate, wages have increased. So I don't think one-offs will be on the scale of what people would have seen last year.” Mr Varadkar also said if the Government moves to help people cope with rising mortgage interest rates, it will be targeted measures.

On helping small landlords in the budget, the Taoiseach said he is of the view that if any tax concessions are given to small landlords, “it must help tenants and renters in some way”. He added: “So if you're going to give a concession for unearned income, I think that has to be something linking it to the rights of tenants and security for tenants too."

The Taoiseach said the Government moved to cut excise on petrol and diesel when fuel hit €2 per litre at the pumps. Speaking to reporters at the Fine Gael think-in in Limerick, Mr Varadkar said he wouldn’t like to see the final restoration of excise duty due at the end of October to drive prices back up to €2 again.

Taoiseach Leo Varadkar said the ECB's tenth interest rate rise isn’t welcome. Photo: Damien Storan

He said: “One of the prices that I am very aware of, and I know all of my colleagues are very aware of, is the price of petrol and diesel.

“It’s the price that’s in your face every day as you drive down the road and it is tacking back up again, in part because some of the temporary tax cuts have been reversed but also because the price of oil is going up again.

“If you remember, we cut excise around the time it hit €2 — you know, I wouldn’t like to see us put excise up to hit €2 again and then to have to bring it down again. So I think what we’ll do between now and Budget Day is really monitor prices at the pump and that will allow us on Budget Day to make that decision.” 

Finance Minister Michael McGrath had also said the final increase would be up for consideration during budget negotiations.

Mr Varadkar also indicated that the Government would introduce targeted measures to help people who have been impacted by mortgage interest rate rises.

He said: “But anything that would be broad-based would be prohibitively expensive. So I think if we are going to do something to help people on mortgage interest, it really should focus on those who are paying the highest rates and those who might be at risk of losing their homes. 

“But the detail of that hasn't been worked out. It's being worked on by Minister McGrath at the moment and also Minister Humphreys as well from the social protection side,” the Taoiseach added.

What's your view on this issue?

You can tell us here

Mr Varadkar said the tenth interest rate rise isn’t welcome “and certainly not going to be welcome for the many people who have tracker mortgages that will see their variable rates go up.” He said he doesn’t anticipate any further interest rate rises.

“One thing we will consider in the context of the budget is some targeted help, not across the board for everybody who's a mortgage.

“We can help people through income tax cuts in that regard but if we do something on mortgage interest, I think it has to be very targeted at those who are experiencing severe financial distress, perhaps have very high interest rates or perhaps are at risk of losing their home.” 

Mr Varadkar also said it is no longer justifiable for the VAT rate of 9% for the hospitality sector. Having been extended on a number of occasions, the 9% reverted to 13.5% at the start of this month.