Dáil recalled to stop fuel excise hikes as Middle East conflict drives prices up

Government leaders have agreed to halt the planned increases in excise duty on petrol and diesel, a decision that will bring TDs back to the Dáil on August 28 for a crucial vote. The move comes as rising oil prices, fueled by the war in Iran, threaten to push diesel above €2 a litre.

The temporary cuts of 11c on petrol and 12c on diesel were due to be unwound on September 1, but the Government has now decided that both the September and October increases will not go ahead. This reversal follows sustained pressure from Sinn Féin, opposition parties, and growing public concern over fuel costs.

Why is the Dáil being recalled early?

The Ceann Comhairle, Verona Murphy TD, has summoned Dáil Éireann to meet at noon on Friday, August 28, 2026, two weeks before the house was scheduled to resume on September 16. TDs will vote on a financial resolution to halt the excise rate increase due in 11 days' time.

Taoiseach Micheál Martin, Tánaiste Simon Harris, and junior minister Seán Canney agreed on Friday morning to stop the planned increases. An incorporeal cabinet meeting, where a civil servant contacts each minister individually, will take place beforehand to formalize the decision.

“The Taoiseach, Tánaiste and Minister Seán Canney have kept in close contact in recent days and weeks and this morning agreed that the planned increases on September 1 and October 1 will not now go ahead,” a government spokesman confirmed.

What changed since the Government's June decision?

In June, the Government extended temporary fuel excise reductions and the National Oil Reserves Agency Levy, setting out a pathway to gradually restore rates from September 1. However, the global situation has shifted dramatically since then.

“It is clear that in the intervening period there has been a change in the global situation and as a consequence the cost of petrol and diesel for consumers,” the spokesman added.

Increasing baseline Brent crude-oil prices, driven by the conflict in Iran, have made the planned increases untenable. Prices at the pump have risen sharply over the past two months as tensions between the US and Iran have escalated.

What does this mean for motorists?

Minister of State Seán Canney said the Government is not ruling out further excise cuts into the winter or another halt to increases in the carbon tax. He emphasized that the decision was made to provide certainty for people facing rising costs.

“We have taken the decision not to change any of the supports right now, and we will continue to monitor what is happening with the price of fuel, and we are also very, very conscious of the fact that people need to have some sort of certainty,” he said on RTÉ Radio One.

The Government introduced a fuel support package costing €250m in March, which was increased to €750m in April after nationwide protests and blockades of fuel depots led to shortages. The package was extended to €1bn this summer.

What did Sinn Féin and opposition parties say?

Sinn Féin leader Mary Lou McDonald had written to Taoiseach Micheál Martin asking him to recall the Dáil to stop the increases. In her letter, she highlighted the pressure on families as schools return.

“At a time when international factors are already pushing prices higher, there is no justification for Government adding further to the costs faced by motorists. Recent weeks have seen fuel prices rise sharply, with diesel now averaging €1.92 per litre and petrol €1.84,” McDonald said.

Sinn Féin finance spokesperson Pearse Doherty said the Government was running budget surpluses “in the billions” and had the money to cushion the public from rising fuel prices. Labour finance spokesman Ged Nash called the decision “as predictable as it was inevitable,” while Social Democrats Deputy Leader Cian O'Callaghan urged a widespread rollout of solar panels to tackle the root causes of the cost-of-living crisis.

Will fuel prices stabilize soon?

Minister Canney said the Government will monitor fuel prices on a weekly basis between now and the budget, and did not rule out further extensions of the excise cuts.

“It's very hard to say what will happen in September or October because the geopolitical situation is so uncertain and so unstable,” he added. “If necessary, supports will continue to be kept in place if we don't see some sort of levelling out and going back to normality within the price of fuel for our customers here in Ireland.”

For now, the recall of the Dáil on August 28 offers a moment of relief for motorists, but the underlying uncertainty of the global oil market remains. The Government's decision reflects a pragmatic approach to protecting Irish households from the ripple effects of international conflict, even as it navigates the delicate balance between fiscal responsibility and public need.