Minister for Finance Paschal Donohoe has announced that the excise on diesel and petrol will remain static as part of Budget 2023.

Announcing the budget measures, the Minister said the current excise reduction of 21 cent per litre in respect of petrol and 16 cent per litre for diesel would be extended until the end of next February.

The 5.4 cent per litre cut for Marked Gas Oil (green diesel) and the 9% VAT rate for electricity and gas will also be extended until 28 February 2023.

Minister Donohoe said that the rate per tonne of carbon dioxide emitted for petrol and diesel will go up from €41 to €48.50 from 12 October.

This will mean that there will be an increase of just over 2c - VAT inclusive - per litre of petrol and diesel.

But the Minister said he recognises the sharp cost of living challenges currently being faced by people, so the Government is proposing to offset this carbon tax increase with a reduction to zero of the National Oil Reserves Agency (NORA) levy.

The extension of the reduction of excise duty on fuel was welcomed by the AA.

"There was a welcome extension of the excise relief on petrol and diesel until 28th of February 2023. So while there are no increases, the average motorist is still paying around €2,000 per year now to fuel their car," said AA spokesperson Paddy Comyn.

To support public health policy to reduce smoking in Irish society, the Minister said he is increasing excise duty on a pack of 20 cigarettes by 50 cent, with a pro-rata increase on other tobacco products.