Dáil Éireann Debate, Thursday - 18 December 2025
250. Deputy Matt Carthy asked the Tánaiste and Minister for Finance the total amount by which he proposes to raise the price of petrol, diesel and home heating oil through increases to the carbon tax, in each year until 2030. [73038/25]
View answerLiquid fuels used for motor or heating purposes are subject to excise duty in the form of Mineral Oil Tax (MOT). MOT comprises a carbon and a non-carbon component with the carbon component also being referred to as carbon tax. The application of carbon tax to petrol and auto-diesel was introduced in December 2009, followed by the extension of carbon taxation to other liquid fuels, including home heating oil, on 1 May 2010.
Ireland’s carbon tax regime is a carbon pricing mechanism which directly links the taxation of fossil fuels to carbon dioxide emissions: a single price is set for a tonne of carbon dioxide, and this price is then applied to each fuel type according to the level of carbon dioxide emitted by that fuel when it is combusted. In this way, the carbon tax applying to each fuel type reflects the level of carbon dioxide emissions that it releases.
Legislation was introduced in Finance Act 2020 to provide for annual increases in carbon tax rates up to May 2030, at which point all carbon tax rates will be based on charging €100 per tonne of carbon dioxide emissions. Carbon tax rates on petrol and auto-diesel are legislated to increase at Budget time each October up to and including 2029, with rates on other liable fuels such as heating kerosene and marked gas oil legislated to increase each May (i.e. after the winter heating season) up to and including 2030. This means that rates for the carbon component of MOT are set to increase a further four times for petrol and auto-diesel, and five times for heating fuels, over the remainder of the trajectory provided for in legislation.
For petrol, the MOT rate increases, inclusive of VAT, will total to 8.1 cents per litre over the remainder of the carbon tax trajectory. The annual increases will be 2.1 cents per litre for each of the next three years, and 1.8 cents per litre in 2029.
Inclusive of VAT the remaining four increases to the MOT rate on auto-diesel will total to 9.6 cents per litre. The annual increases will be 2.5 cents per litre for each of the next three years and 2.1 cents per litre in 2029.
Kerosene is the most commonly used oil for home heating. Inclusive of VAT the MOT rate increases on heating kerosene will total to 10.7 cents per litre over the remainder of the carbon tax trajectory. The annual amounts will be 2.2 cents per litre for each of the next four years and 1.9 cents per litre in 2030.
Marked gas oil is also used for heating. Inclusive of VAT the remaining five increases to MOT on marked gas oil will total to 11.2 cents per litre. The annual increases will be 2.3 cents per litre for each of the next four years and 2 cents per litre in 2030.
