Paul Murphy
Question:296. Deputy Paul Murphy asked the Tánaiste and Minister for Finance whether he will reduce tax on fuel in order to facilitate the capping of prices at affordable levels. [26785/26]
View answerTuesday, 21 April 2026
Questions (296)
Written answers
It is important to underline that the spikes in the price of fuels are not as a result of taxes. The price of fuel is determined by a number of factors including the wholesale market price, international market dynamics, international exchange rates impacts, distributional costs, retail pricing policy and taxation.
What we are currently seeing is a massive increase in the wholesale market price of oil, which is driving this increase in fuel costs.
As the Deputy will be aware in Ireland there is a free market economy as is the case in most countries globally. As such prices are determined based on supply and demand. In a market economy price controls are rarely, if ever, used; instead prices are set by individual businesses.
Reducing tax to facilitate price capping is not a viable option ; as the Deputy will be aware there is limited scope to reduce taxes and as such there is no guarantee that tax reductions can achieve price capping. It is important to note that revenue raised from taxes is used to fund essential services such as health, education and policing.
The Deputy may also be aware of the recently published CCPC Fuel Report (March 2026) which outlined 'that setting prices in complex international markets where prices fluctuate every day is extremely challenging and is likely to cause further harm to businesses and consumers by significantly disrupting supply and distorting the market. For example, the 2021 price caps on diesel and petrol in Hungary resulted in rationing and queues before they were removed to restore supply.'
Government is acutely aware of the severity of the impact of this fuel crisis on households and businesses across the country and has engaged extensively with stakeholder bodies over the last number of weeks to ensure all perspectives are viewed and addressed to the best extent possible.
As the Deputy will be aware, we have put forward a comprehensive and far reaching package of measures which will provide much needed support across the country.