The Competition and Consumer Protection Commission has reported that the excise cut introduced by the Government last March was largely passed onto Irish consumers, although there was a delay.
Following analysis of the pricing related to 50pc of service stations in the State, the CPCC said that the increase at the pumps in the period leading up to the excise duty cut in March was a result of “increased international prices” and not due to illegal co-ordinated pricing behaviour.
In March, the government announced that excise duty on petrol and diesel would be cut as global fuel prices soared following Russia’s invasion of Ukraine.
However, following the decision, the CPCC received over 200 complaints by consumers who were impacted by rising prices at the pump despite the excise duty cut.
The surge in prices for petrol and diesel has now been attributed to increased international prices in the period prior to the Government decision to cut excise duty.
The CCPC found no evidence of stations illegally coordinating prices or a lack of competition across the State in its analysis of the period between 2 and 20 March 2022 but stated that the the excise duty cut was “not instantly” passed on.
“Changes in the price of fuel at the pump were largely driven by changes in the wholesale price that petrol station operators had to pay for their supplies,” said chairman Jeremy Godfrey.
“Following the excise duty cut, the difference between pump price and the wholesale price generally remained within the normal range for the industry.”
However, he did note that consumers were concerned when pump prices did not immediately decline on the day the excise duty cut was introduced.
“Our analysis found the main reason was that it took time before petrol stations received supplies of fuel that had been taxed at the lower rate,” he said.
The CCPC noted that there was a delay for consumers at some stations to notice the decrease.
“The delay varied from station to station because of difference in stock levels and differences in the supply arrangements between petrol stations and their suppliers,” Mr Godfrey added.
The pump price was also still impacted at the time by volatility in cost of fuel, making it challenging to isolate the impact of the excise duty reduction.
Mr Godfrey said that an excise duty decrease taking time to impact pump prices has been observed in other markets and recommended Government to take this into account when sharing updates with consumers going forward.