Minister for Finance Paschal Donohoe extended excise reductions on fuel until 28 February 2023.

This extended reduction equates to 21c/l for petrol, 16c/l for diesel and 5.4c/l for green diesel. The fuel measures are part of a suite of excise reduction extensions, which will cost the State €117m.

Budget 2023 will also see an increase in the carbon tax rate from €41 to €48.50 per tonne of CO2. This will apply to auto fuels from 12 October 2022 and all other fuels from 1 May 2023. It will equate to a 2c/l increase on the cost of petrol and diesel.

However, the Government says this is to be offset by a 2c/l cut to a different fuel levy – the national oil reserves agency levy.

This will offset the tax rise, leaving pump price increases effectively neutralised.

Overall, the increase in the carbon tax rate will generate €151m next year.