Brief relief at the pumps

Excise duty cuts on the way for motorists

Hard-hit motorists are poised for a temporary reprieve, after the government announced cuts to excise on petrol and diesel yesterday (Tuesday) in a move aimed at easing prices at the pumps. However, the relief may be short lived as global energy markets remain volatile amid ongoing conflict in the Middle East.

From midnight diesel excise is set to drop by 20 cents per litre, with petrol reduced by 15 cents. The temporary measure will run until the end of May. Alongside the cut, a diesel rebate scheme for hauliers and bus operators is expected to be backdated, while the Fuel Allowance - a €38 weekly payment to help with heating costs - will also be extended.

But for Padraig Rudden, who operates three of the busiest service stations surrounding Cavan Town, the announcement is a mixed blessing.

“It’s a win-win” he says for the government, who look set to reap the good PR, while still raking in at least 12.5 cents more than they were before the 2026 Iran war first began at the end of February.

Mr Rudden hopes to be able to pass on savings to his customers “within a day” once the excise cut comes into play. His tanks get refilled around every five days, but even at that, the risk is enormous with sudden price surges eating into what he says are already thin margins.

The retailer's stations at Farnham Road, Moynehall, and Dublin Road have absorbed some of the recent spikes. Last week alone, fuel prices rose 17 cents in three days - six cent on Wednesday, seven cent on Thursday, and a further four cent on Friday. “I filled one tank on Thursday and another on Saturday,” he explains.

“At one site, I lost 13 cents per litre heading into the weekend. You just have to swallow it.”

Several retailers the Celt spoke with yesterday (Tuesday) said, by lunchtime, they had received no word from head office, in the case of chain operators, on whether prices would fall immediately from Wednesday morning.

The pressure is particularly acute for smaller operators. Excise is charged the moment fuel leaves the central depot, and with stations holding tens of thousands of litres, the potential loss is significant.

“If you’ve got 20,000 litres in a tank today, the loss could be up to €4,000.

There’s enormous pressure to reduce prices immediately,” Mr Rudden told the Celt.

Home heating oil prices, meanwhile, have reportedly doubled to €900 per 500 litres; while petrol and diesel reached record highs this week.

At most service stations, margins are around three cents per litre, and even that is now uncertain.

Families are feeling the pinch too. Mr Rudden estimates that a two-adult household with daily commutes is €80 worse off per week due to fuel alone.

“People are already cutting back on non-essential items,” he says.

“They might skip their regular cup of tea or coffee. The pie is only so small - something has to give.”

Oil prices surged amid tensions involving Iran, the US, and Israel.

Prices eased temporarily after former US President Donald Trump announced a postponement of military strikes on Iranian energy infrastructure, claiming talks with Tehran had taken place - though Iran denied this as "fake news".

The announcement briefly pushed crude prices down by 10%, eventually settling around $104 a barrel.

“When he opens his mouth, the markets move,” says Mr Rudden of Trump, who also voices frustration at the wider public ignorance of fuel taxation.

“For every 10 cents spent at the pumps, the government takes 6.5 cents.

That leaves us to absorb the loss on what remains in the tanks whenever prices fall,” he said.

Taoiseach Micheál Martin welcomed the excise cut, noting its importance for households and the haulage sector. “Rising fuel prices have already had an impact on people,” he said. “It’s critical that we engage with the haulage industry to ensure it remains viable and sustainable.”

Yet industry voices urge caution. Kevin McPartland, CEO of Fuels for Ireland, believes the government’s measures are reactive, rather than strategic, and described the cut in excise “a knee-jerk response”.

“Ireland has some of the most expensive fuel in the EU. Crude oil prices fluctuate constantly due to global events, tweets from politicians, and currency swings. Retail prices often lag behind wholesale changes, so these short-term measures are only a partial solution,” says Mr McPartland who wants to see a broader review of fuel taxation and compliance costs.

In the longer term, Fuels for Ireland want the government to form an expert group to manage fuel policy focusing on three priorities - supporting the transition to sustainable and renewable energy, ensures the government gets a fair tax take from fuel, and “most importantly” keeps fuel affordable for consumers.

“The problem now is that affordability has been lost in the rush to meet environmental targets,” Mr McPartland says.

In the immediate term, Mr Rudden predicts that the planned excise cut could bring fuel prices down by roughly six cent per litre over the week, potentially edging closer to the €2-per-litre mark. But he cautions that the situation remains “unstable”.

“The government has acted, but they could’ve done better,” he concludes. “At 20c off excise, that will leave the government up 12.5c compared to the start of the war.

"If they'd gone 30c, that would've brought back nearer to where it was before this all happened and they'd still be taking in above what they were.”