The competition watchdog notes that excise duty cuts were “not immediately” passed on to consumers

The Competition and Consumer Protection Commission has reported that the excise duty cut introduced by the government last March has been largely passed on to Irish consumers, although there have been delays.

After analyzing prices for 50 percent of gas stations in the state, the CPCC said the spike at pumps in the period leading up to the March consumption tax cut was due to “increased international prices” and not illegal causes of concerted pricing behavior.

In March, the government announced it would cut excise taxes on gasoline and diesel as global fuel prices soared after the Russian invasion of Ukraine.

However, following the decision, the CPCC received over 200 complaints from consumers who were affected by rising prices at the pump despite the excise duty cut.

The rise in petrol and diesel prices is now being attributed to higher international prices in the period leading up to the government’s decision to cut consumption taxes.

The CCPC found no evidence of illegal gas station price coordination or a lack of competition across the state in its analysis of the period between March 2 and March 20, 2022, but found that the excise duty cut was “not passed on immediately.”

“Changes in the price of fuel at the pump were largely due to changes in the wholesale price that service station operators had to pay for their deliveries,” said Chairman Jeremy Godfrey.

“After the excise duty reduction, the difference between the pump price and the wholesale price generally remained within the industry norm.”

However, he noted that consumers were concerned when pump prices did not fall immediately on the day the excise duty cut was introduced.

“Our analysis showed that the main reason was that it took some time for petrol stations to receive shipments of fuel that had been taxed at the lower rate,” he said.

The CCPC noted that consumers at some stations were slow to notice the drop.

“The delay varied from station to station due to different stock levels and different supply arrangements between service stations and their suppliers,” added Mr. Godfrey.

The pump price at this point was also being impacted by the volatility of fuel costs, making it difficult to isolate the impact of the excise duty cut.

Mr Godfrey said cuts in excise duties were being observed in other markets, which took time to impact pump prices, and recommended the Government take this into account when providing updates to consumers in the future. The competition watchdog notes that excise duty cuts were “not immediately” passed on to consumers

Fry Electronics Team

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