THE TAOISEACH’S COMMENTS on fuel prices bring an important choice into focus.

Micheál Martin has acknowledged that the elevated petrol and diesel prices motorists are now experiencing may represent a “new normal”. He has also indicated that the government will consider further measures in the coming weeks and that the future of the carbon tax will form part of that discussion.

If the government decides that motorists and businesses need further protection from rising fuel costs, there is a better option than slowing or postponing carbon tax.

Proceed with the carbon-tax increase, but reduce excise duty by an equivalent amount so that the overall tax burden on petrol and diesel does not rise.

It would protect motorists and businesses from an additional policy-driven increase at the pump, while preserving the purpose and trajectory of carbon tax. That distinction matters.

Carbon tax has a specific purpose

Carbon tax is not simply another charge on a litre of petrol or diesel. It has a specific policy purpose: putting a price on emissions, encouraging the transition towards lower-carbon alternatives and generating revenues that are ringfenced for climate action.

Excise duty does not perform that same function.

So if the government believes the overall level of taxation on fuel has become too high in the current circumstances, why should carbon tax........

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