Excise cuts on petrol and diesel to be phased out by end of 2026, Tánaiste confirms

Government agrees phased withdrawal of fuel excise relief while the Tánaiste presses retailers over delayed reductions at the pumps

Simon Harris has confirmed petrol and diesel excise cuts will be fully phased out by the end of 2026 while questioning why fuel prices remain high. File picture

Excise cuts on petrol and diesel will be unwound and phased out by the end of 2026, Tánaiste and finance minister Simon Harris has confirmed.

He also questioned why prices at the pumps have not fallen more, given that the price of a barrel of oil is dropping.

Cabinet signed off on plans agreed by the Government leaders on Monday evening to extend the 32c excise cut on diesel and 27c cut on petrol from August 1 to September 1. They will then be phased out.

The excise cuts will be wound down in September, October, November and December.

Speaking on RTÉ’s News at One, Mr Harris said that the excise cuts will be fully reversed by the end of 2026.

He said he wanted to avoid a “cliff edge” for people.

“We wanted to provide certainty for people, and [we are] providing that certainty more than a month out now from the due date of expiry,” the Tánaiste said.

“We wanted to manage inflation. The officials in my department, the economists, estimate that the benefit of the government's measures to date have suppressed inflation by around 0.6%, so helping keep food costs down, for example.

“Crucially, and I think this is the point we're going to have to watch very carefully. We want to provide a bit of time for the petrol pump operator to pass on the benefit in the reduced cost of oil to the person at the pump.” 

Mr Harris said the price of a barrel of oil has fallen from $120 to $74 on Tuesday morning, adding that by the time the excise cuts are fully phased out, petrol and diesel prices should be falling.

He said there is “no evidence” to suggest that retailers are not passing on cuts to customers, but that they must explain when cuts will be seen at the pumps.

He said he is a “little surprised” that prices have not already dropped.

“I want to engage with them directly, in fairness, and not through the airwaves, as to when they expect to see the benefit at the pumps,” the Tánaiste continued.

“It’s not credible that oil used to cost $120 a barrel and now costs $73 a barrel, so it might be that there's a little bit of a lag. Let's hear it.

“I’m saying I’m a little surprised that [prices haven’t come down].”