Price hikes to hit next year as carbon tax of fset expires

Ryan: Cut to oil reserves levy a ‘short-term’ measure

HOUSEHOLDS dependent on home heating oil will be hit with price hikes next year as measures outlined in the Budget to cancel carbon tax increases will expire in February.

Carbon tax on fossil fuels will increase as planned after the Budget, but the first price hikes will be offset by removal of a separate levy.

It will take effect from October 12 on petrol and diesel, in theory adding 2c per litre, but the removal of the NORA (National Oil Reserves Agency) levy, which also adds 2c per litre, will mean no change in price at the pumps.

Environment Minister Eamon Ryan revealed yesterday that the cut to the NORA levy will lapse at the end of February, meaning that fuel prices – including those for motorists – will increase, as will home heating oil, which has already seen price increases of 140% in the past year.

Carbon tax hikes will also come into effect for home heating oil and solid fuels next May and there were no measures outlined in the Budget to cancel out those increases for households. Mr Ryan said the cut to the NORA levy was a ‘shortterm’ measure.

‘The carbon tax will come in as planned. Removing the NORA levy is due to run until the end of February and it will come back in that time frame when we review everything,’ the Green Party leader said.

Meanwhile, the Government confirmed in the Budget that households will receive three separate €200 energy credits in the next six months – a measure set to cost the Exchequer €1.2billion.

The first credit will be received by households in November while the other two payments will be received into accounts in January and March, amid concerns over rising energy costs.

As uncertainty remains over the future of energy costs, Mr Ryan didn’t rule out another energy credit having to be paid out to people next year.

However, the Transport Minister said any extra payment would not be paid out before the spring.

He also said that the Government will have to ‘review everything’ early next year – adding that they would not ‘come back every month’ to assess the situation.

The Environment Minister said that the energy credits, which will be removed from household bills by energy providers, are ‘only one piece to the jigsaw’ of Government’s cost of living package.

Next year, grants encouraging motorists to buy electric vehicles (EVs) will be reduced next year, dropping from €5,000 to €3,500 for most people and from €10,000 to €7,500 for taxi drivers.

Speaking about the planned cut to EV grants, Mr Ryan said: ‘I think that’s appropriate because we’ve always said we’re not going to provide those grants for forever and a day.

‘You have to start giving a signal and we also expect that as more car companies start to provide EVs and as the supply chain issues start to free up, which they should next year, we’ll see the prices coming down anyway because of the competition.’ The Green Party leader continued: ‘It’s appropriate that we still provide a grant but I think it’s also appropriate that we start to tail that off and then what we can do is use some of that funding to support more charging infrastructure and other elements that we need.’

Meanwhile, €337 million is set to be put towards home energy upgrades for 37,000 homes next year while a new low-cost loan scheme for residential retrofits will also be rolled out.

The AA yesterday raised concerns that there ‘wasn’t much’ for motorists in the Budget.

While the organisation welcomes an extension in the excise relief on petrol and diesel until the end of February next year, Paddy Comyn, head of communications with the AA, said that motorists are still very much struggling with high fuel prices.

‘So while there are no increases, the average motorist is still paying around €2,000 per year now to fuel their car,’ he said. Finance Minister Paschal Donohoe also announced plans for an energy support scheme specifically to help businesses with their energy costs throughout the winter, with the State set to pay up to €10,000 a month towards bills.

The Temporary Business Energy Support Scheme (TBESS) will open for businesses that have seen their average energy unit price increase by 50% or more since 2021.

Those that qualify for the scheme will receive 40% of the amount that the bills have increased by.

Labour Finance spokesperson Ged Nash yesterday criticised the Government’s plans to introduce the new scheme rather than moving to introduce a price cap on energy, describing the move as a ‘nothing short of a licence for energy companies to print money’.

‘It’s only one piece of the jigsaw’ ‘An undercooked 11th-hour measure’

‘The TBESS is an undercooked 11th-hour measure, and it really shows,’ he said.

‘The details are sketchy and it is simply back-of-the-envelope stuff.

‘It is alarmingly clear that lessons have not been learned from previous support schemes,’ he said.

‘Rather than cap the price of energy and guarantee the jobs and wages of workers, the new TBESS will in effect indirectly subsidise profiteering energy companies.

‘The fact that eligibility for the scheme depends on a 50% increase in average unit energy prices (2021 versus 2022) will be music to ears of energy companies.

‘It is nothing short of a licence for then to print money and to continue pushing up their energy prices.

‘In short, it is another blank cheque,’ he added.