Dáil Éireann Debate, Tuesday - 13 January 2026
360. Deputy Fionntán Ó Súilleabháin asked the Minister for Climate, Energy and the Environment to explain the factors contributing to the significant increases in the price of heating oil in 2025 compared with 2024, which is placing a considerable financial burden on many households across the country; the measures being considered to alleviate the pressure on such households; and if he will make a statement on the matter. [75028/25]
View answerFinal retail prices for kerosene are impacted by various energy market dynamics such as geopolitical tensions, supply constraints and exchange rates, among other issues. Additionally, taxation impacts final prices paid by consumers for home heating oil and other carbon-emitting fuels. Carbon tax is an important policy tool in reducing our reliance on fossil fuels, incentivising a switch to alternative fuels and thereby tackling the significant threat to society which climate change poses.
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. The carbon tax regime is a carbon pricing mechanism which directly links the taxation of fossil fuels to carbon dioxide (CO2) emissions. This means a single price is set for a tonne of CO2 and this price is then applied to each fuel type according to the level of CO2 emitted by that fuel when it is combusted. In this way, the carbon tax applying to each fuel type reflects the level of CO2 emissions that it releases.
I am advised that analysis undertaken by the ESRI and the Department of Finance shows that the carbon tax is a progressive measure in light of the redistribution of revenue raised for just transition actions such as targeted social welfare interventions and the provision of partial funding of the national retrofit programme. A document entitled 'The use of carbon tax funds' is published annually alongside the Budget. The latest document was published as part of Budget 2026 and is available at: www.gov.ie/en/department-of-public-expenditure-infrastructure-public-service-reform-and-digitalisation/publications/budget-2026-the-use-of-carbon-tax-funds/
