Pa Daly
Question:331. Deputy Pa Daly asked the Minister for Transport the measures he is taking to reduce the cost of petrol and diesel; and if he will make a statement on the matter. [73654/25]
View answerThursday, 18 December 2025
Questions (331)
Written answers
At the outset, the Deputy should note that both I and the Government are conscious of the implications of fuel costs for all sectors of society.
As regards taxation, Ireland’s application of excise duty on fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive. The Energy Tax Directive prescribes minimum excise duty rates for fuel with which all Member States must comply.
While taxation affects the final retail price of fuel, a number of factors also contribute to the final cost including energy market dynamics, wholesale pricing, individual retail pricing policy, transport costs, and exchange rate fluctuations. The best way of insulating our economy and society from fuel prices shocks is to reduce our dependence on fossil fuels.
The Government currently has incentives in place to promote investments in renewable and low-carbon energy products, such as HVO and other biofuels. Biofuels, such as Hydrotreatred Vegetable Oil (HVO), are relieved from the Carbon tax. This favourable tax treatment is intended to promote a higher level of biofuel usage and supports the Government’s commitment to incentivising more environmentally friendly alternatives to fossil fuels.
Furthermore, Carbon Tax revenues are ring-fenced for climate action and just transition measures. Analysis undertaken using SWITCH, the ESRI tax and benefit model, to simulate the impact of the carbon tax increase and the compensatory welfare package estimates that the net impact of the combined measures is progressive. Half of households are better off due to the measures part-funded by additional carbon tax funds, with households in the bottom four income deciles benefitting the most.