Dáil Éireann Debate, Tuesday - 29 September 2026
128. Deputy Matt Carthy asked the Tánaiste and Minister for Finance if he will remove excise duty from home heating oil in recognition of the severe pressures faced by families as a result of soaring costs. [68612/26]
Amharc ar fhreagraI have been raising the issue of home heating oil with the Tánaiste over a long period. The reality is that people have used home heating oil right throughout the current crisis. They use it to heat their homes. They also use it to heat their water in order to be able to wash the dishes. Home heating oil is what 700,000 households across the State rely on, and the Tánaiste refused to cut any excise at all from it because all of the excise is carbon tax. I put it to the Tánaiste again that he needs to reduce the excise on home heating oil. He needs to take it away completely.
It can be done under the European rules. There is no minimum requirement and therefore the Government made an error by not supporting families in the past when it reduced it on petrol, diesel and green diesel.
Thanks, Deputy. You can come back in afterwards.
I am asking the Minister to take all the excise away from home heating oil while these prices remain high.
I thank the Deputy very much. The Government is very conscious of the price increases in home heating oil. They are very real and significant. The conflict in the Middle East has severely impacted the cost of kerosene. We have taken some measures that have helped those most at risk of fuel poverty and the Deputy knows that. We extended the fuel allowance by a further four weeks. That resulted in additional payments to about 470,000 fuel allowance recipients, many of whom would use home heating oil. It meant a typical household receiving the fuel allowance, which is roughly a quarter of all households in the country, received €1,216 over the course of the fuel allowance season. We also deferred the planned increase in carbon tax on home heating fuels which was due to occur last May until after budget day and said we would have an opportunity to review these matters again in the budget. As the Deputy knows, we took a range of other measures as well, including expanding fuel allowance eligibility.
The Deputy is correct - we have debated this for quite some time - that the fuel excise applied to kerosene home heating oil is purely carbon tax. We need to be honest about what is and is not possible to alleviate the burden of higher fuel prices in the short and long term. Changes have to be carefully calibrated. We are working through this as a Government and the details will be published on budget day. However, as the tax strategy group paper identifies, we cannot treat carbon differently on different products. Regarding kerosene, there may well be something we can do in that space. I do not necessarily want to be argumentative about this but there is advice available to me - I am happy to discuss it and no doubt we will during the budget - on not risking our derogation in relation to the ETS. We certainly do not want to end up, and I know the Deputy does not either, paying billions more to Europe as a consequence of doing that, so there is a balance we have got to get right on that. I am happy to share our views on that. There obviously will be some people disproportionately at risk of fuel poverty and we have got to continue to target those measures at them. We need to look at all this in the round and we need to continue, to Deputy Heneghan's point, to look at helping people move from fossil fuel-dependence, though I accept that is not as easy for everybody. This will all be looked at in the round and I have been clear I am minded to do something about the taxation that applies to kerosene.
We had the discussion earlier on and the Minister will say it was a Fine Gael Government that did this but there is no doubt, if you look back at the record, that the reason the Government did not reduce any excise duty on home heating oil is because it is carbon tax, which is this Holy Grail. I really do not want to go into a discussion on that, but the Government is moving now. For the first time it is going to reduce the carbon tax. That is good. It is good that the Government has got there, or that it is going to get there next Tuesday.
As for what the Minister says about what is and is not possible in Europe, if he is willing to share that he can send it to me. My understanding is that the new rule will not take effect until 2028 and therefore a temporary reduction on kerosene will not have an impact in relation to this. If we do this for a period during 2027 it will not have an impact. Obviously if we were to continue it into 2028 it would but for the immediate future it is a bit of a red herring, unless the Minister knows differently. The issue is that it is within his gift to take all the carbon tax off home heating oil. That is about 16 cent per litre. We charge VAT on top of the carbon tax so it would reduce the cost of a fill by €183. Would that undo the price increases that have happened? Not a chance. Prices have gone through the roof. They have gone up about €700 since the start of the year. However, it would show that the Government is doing the maximum it can on excise duty on this type of fuel, and that is what I am asking the Minister to do.
We should have an informed conversation about this. What the Deputy has said is true. There are things the Government can do and this House can do, and there are things we cannot do. I am going to be honest, as the Deputy has been honest, in saying whatever we do on the taxation side will not be enough - I am talking about the taxation on energy piece - to bring prices back to where they were last year. The Deputy is not seeking that and nor am I. There are things we can do to not make the situation worse and there may be things we can do to make the situation a little better. We need to get that calibration right and that is what we are working to do. There is the question of whether you do something temporary or whether you try to provide clarity for the next number of years. At the moment, as the Deputy knows well, there are two things, namely the trajectory out to 2030 and how the carbon tax is applied to products. Do we try to provide just help in the here and now or do we try to provide a clear view on the trajectory of carbon tax on kerosene out to 2030? If we do, that very much impacts on ETS 2. I accept the Deputy is correct about it not coming in until 2028 and I am happy to very honestly debate this issue but we are looking at all of this in the round. Kerosene and gas are two issues we should seriously look at.
This again bring us back to the point we are at now, which for a lot of people feels like an emergency. There are things happening in this State that are genuinely concerning from a health and safety point of view. There are mothers and fathers going to the petrol station and filling five-gallon drums with kerosene. I am not sure how good an idea it is to be driving around country roads with five-gallon drums of kerosene in the boot, but people cannot afford anything else. There are plumbers being called out to deal with airlocks over and over again. They are refusing to charge the call-out fee because they know the only reason the system is airlocked is there is no oil in the tank. At a time when there is money in our coffers to support families I am asking the Minister again because this is something he has the ability to change. There is no minimum level of carbon tax on kerosene at this point in time.
Thanks, Deputy Doherty.
The Minister can reduce it all. He can take the cost down by €183 a fill. We published the legislation.
Deputy, we have one more question.
The Government voted against that and the following day it came out and said it might do something on carbon tax. I welcome that. My job is to push the Minister into positions he does not want to be in. That is fine. He will refuse to say he did not want to be there but I can play back the tunes in here.
The Tánaiste to respond.
I can show the Minister his predecessor saying the Government was not going to introduce-----
Thanks, Deputy.
-----a renter's tax credit, that it was not going to introduce mortgage interest relief-----
Thanks, Deputy.
-----and that it was not going to introduce the IREF stuff. I could play all those things back but my job-----
You are just taking time from the next question, Deputy.
-----is to keep on pushing and pushing.
With respect, will you please sit down?
The question I am asking is whether the Minister is minded-----
Can you give the Tánaiste an opportunity to respond, please?
-----to go the full level in relation to excise duty on kerosene.
The Deputy has described his job as he views it. It is of course his job to hold me to account in this House. It is also our job, every now and again, to try to work collaboratively on different issues. We will not agree on all of it and that is fine and healthy but we agree that we are living through a cost-of-living crisis, that the cost of kerosene and energy is very high, that we need to look at measures to try to assist people and that even when we do that there are global factors.
Not everybody is equally affected. We all know that and that is why targeted measures through the fuel allowance are also important to reach those most at risk of fuel poverty. Not everyone is at risk of that. The cost of living is real for lots of people but some people are acutely at risk of fuel poverty. Trying to reach them in the here and now is important too. We showed an ability to do that somewhat last year with the fuel allowance changes. That helped people. Enabling people to get that lump sum option helps to fill the home heating tank as well. There are now about 470,000 households getting the fuel allowance as well, so it is not insignificant. I take the Deputy's point. We published the tax strategy group paper this summer to have an informed discussion on the carbon tax trajectory and how it applies to certain products. We will bring forward our specific proposals next week.
Thanks, Tánaiste. The final question tonight is again in the name of Deputy Carthy, to be taken by Deputy Doherty.
I am sorry, it is Deputy Boland.
