Dáil Éireann Debate, Wednesday - 6 May 2026
228. Deputy Sean Fleming asked the Tánaiste and Minister for Finance if a response will issue to matters raised in correspondence regarding the cost of home heating oil and kerosene which is used for approximately 700,000 Irish homes (details supplied); and if he will make a statement on the matter. [32849/26]
Amharc ar fhreagraThe Government is very conscious of the substantial price increases in home heating oil as a result of the conflict in the Middle East.
It is important to note that the spikes in the price of home heating oil are not as a result of taxes, nor Government policy, but due to the wholesale market price of oil. Mineral Oil Tax is charged on a volumetric basis. It does not change when the wholesale price increases or decreases.
With regard to Kerosene, there is no non-carbon component of Mineral Oil Tax applying to heating oil. The Mineral Oil Tax applying to Kerosene is fully comprised of the carbon charge (carbon tax).
To protect those most at risk of fuel poverty, Government extended the fuel allowance season, which would have normally run for 28 weeks, by a further four weeks in order to ease the financial burden on households. This will result in additional payments of €152 to more than a quarter of all households.
For reference, a typical household receiving the fuel allowance will have received €1,216 over the course of the fuel allowance season.
Furthermore, conscious of the pressure being experienced by households owing to the conflict in the Middle East, the Government has announced the deferral of the next planned increase in carbon tax on home heating fuels, which was scheduled for 1 May, until 14 October.
Carbon tax remains an important part of Ireland’s overall commitment to tackling climate change and to lessen Ireland's dependence on fossil fuels, with successive annual budgets providing additional funds for targeted social protection payments, residential and energy efficiency measures, as well as funding to encourage green farming practices.
As of Budget 2026, the Government has allocated over €4.2 billion in carbon tax revenue for these purposes since 2020. ESRI analysis consistently shows the lower income deciles are better off as a result of the social protection measures funded by the increased carbon tax.
Our need to decouple from fossil fuel dependence and achieve energy security is even more apparent now given the levels of volatility in international fuel markets. Ireland’s long-term commitment to tackling climate change remains strong.
Policy options with regard to excise duty rates on energy products are considered as part of the annual Budgetary cycle which includes the presentation of tax policy options to the Tax Strategy Group. This involves consideration of policy rationale behind tax rates including relevant social, environmental and economic factors. Previous Tax Strategy Group Papers are available online: www.gov.ie/en/department-of-finance/collections/budget-2026-tax-strategy-group-papers/.
Policy options as regards energy supports, such as energy credits, are for consideration by the Minister for Climate, Energy, and the Environment.
