Promised fuel cut that never happened has cost Irish motorists an extra €20m so far

The fuel industry claims an “oversight” on the part of officials meant that the cut to the National Oil Reserves Agency (NORA) levy never happened.

Last night the Department of Environment Climate and Communications (DECC) confirmed to the Irish Independent that the promised 1c per litre price cut to motor fuel “has not been proceeded with”.

While there was a substantial excise duty cut in March, motorists are struggling like never before with the soaring cost of fuel.

The total volume of petrol and diesel sold each month is almost 380 million litres.

The failure to deliver the promised 1c per litre NORA cut means that an extra €3.8m is going into Government coffers from Irish motorists every month.

Minister Ryan announced an initial price cut of 2c per litre on motor fuel on November 25, 2021, the same day he published the Renewable Fuels for Transport Policy.

The policy required all fuel suppliers to increase the amount of biofuel – liquid fuel produced from renewable sources such as used cooking oil – from 11pc to 13pc, and it came into force on January 1.

Mr Ryan said that to mitigate against the impact of increased fuel prices, “interim measures will be put in place to help with any fuel price impact caused by these changes”.

It was to involve a 1c per litre reduction in the NORA levy and 1c per litre cut in excise,

The biofuels announcement came at a time of deep political unease for the Department of Transport due to a public outcry over increased fuel prices.

A political source told the Irish Independent that the biofuel announcement was viewed as extremely “politically sensitive” at the time.

“They were taking serious heat from Fianna Fáil and Fine Gael backbenchers over fuel costs, so they had to do something.

“They went to the Department of Finance and asked the Minister (Paschal Donohoe) to sanction a 1c cut in excise duty.

"They were supposed to match it with a 1c cut to the NORA levy. Paschal was very hard to persuade but ultimately agreed.”

The price cut was initially chalked down to be passed on to motorists on January 1 to coincide with the enactment of the Renewable Fuels Policy.

However, in late December, fuel suppliers were informed it was not going ahead at that time.

Kevin McPartlan, CEO of Fuels for Ireland, said this late notice led to a “scramble” as all the companies had begun to change their pricing models and internal IT systems. He said that they were then told it would be part of the Finance Act for April this year.

“And in late March, days before it was due to come in, we were told there was an oversight, the legislation wasn’t prepared, and the NORA levy won’t be reduced.

“The Department of Finance kept its end of the agreement and introduced the 1c per litre reduction on excise duty,” Mr McPartlan said.

“The NORA levy can be changed with a simple statutory instrument; that’s all Eamon Ryan would have to do.

"I cannot for the life of me understand why it has taken eight months to introduce this. It would give one cause to question how sincere the Government is when it says it is doing everything to keep fuel prices low.

“We are still waiting, and we are calling on the Government to introduce this immediately as it would show a level of commitment to do all they can to reduce fuel prices. “

A senior Government source meanwhile said Paschal Donohoe was left “furious’ by the situation.

“Paschal was very hard to persuade around the value of this. He was furious that the Department of Finance honoured its obligation and DECC did not. They came to him, remember.”

In response to questions by the Irish Independent, a spokesperson for the Department of the Environment, Climate and Communications said: “The excise reduction of 1c per litre was introduced with effect from April 1.

"This was in addition to the substantial reduction in excise duty announced by Government on March 9, which amounted to 20c per litre of petrol and 15c per litre of diesel,” the spokesperson said.

"These significant interventions have limited the impact of higher oil prices for consumers.

“In the context of these sizeable reductions, the minimal NORA levy rate reduction of 1 cent per litre has not been proceeded with.

"All matters pertaining to cost of living, including fuel prices, will be reviewed again at Budget time.”