Explaining the Government’s Package of Fuel Supports
What is this Snapshot about?
In April 2026, the Government announced a new package of supports to reduce fuel costs for households and businesses. The measures were introduced in response to sharp increases in fuel prices, driven by international instability and disruptions to energy supply.
This PBO Snapshot explains:
- What measures were announced
- Who they are aimed at
- How the supports work
- What they mean for the public finances
This Snapshot does not assess policy outcomes. Its purpose is to help Members of the Oireachtas and the public see through the numbers.
What supports were announced?
The package includes three main elements:
- Temporary reductions in fuel taxes
- Direct payments to transport operators
- A fuel subsidy scheme for farming, fishing and related sectors
These measures are time limited and sit alongside €250 million in fuel supports already announced earlier in 2026.
Reductions in fuel taxes
The Government agreed to further reduce excise duty on a range of fuels:
- Diesel: total reduction of 32 cent per litre
- Petrol: total reduction of 27 cent per litre
- Green diesel (marked gas oil): total reduction of 7.4 cent per litre
These reductions include an existing cut to the NORA levy and apply from midnight on 14 April 2026 until 31 July 2026.
In addition, the planned increase in carbon tax, due to take effect on 1 May 2026, has been deferred until Budget time.
Explainer: What is excise duty?
Excise duty is a tax charged on specific products such as fuel, alcohol and tobacco.
When excise on fuel is reduced, the price at the pump usually falls, though the final price also depends on wholesale costs and VAT.
Explainer: What is the NORA levy?
The NORA levy funds Ireland’s oil emergency reserves. Reducing the levy lowers fuel prices but also reduces funding set aside for energy security.
Supports for the transport sector
To support haulage and coach operators, the Government will introduce a Road Transporters Support Scheme (RTSS).
Key features include:
- Direct payments to licensed haulage and coach operators
- Payments weighted so smaller operators receive proportionately more support
- An initial backdated payment for March 2026
- Further monthly payments for April and May 2026, if diesel prices remain above €1.90 per litre
The scheme is expected to cost around €40 million per month while in operation. [gov.ie]
Separate supports will also be provided to coach operators delivering Local Link and school transport services, through existing contractual arrangements. [gov.ie]
Explainer: Why target transport operators?
Transport businesses are highly exposed to fuel costs and play a key role in keeping supply chains moving. Targeted supports aim to limit knock on effects for the wider economy.
Fuel supports for farming, fishing and related sectors
The package includes a €100 million Fuel Subsidy Support Scheme for:
- Farmers
- Agricultural contractors
- Fishers
- Other fuel intensive sectors such as forestry and specialist horticulture
The scheme will provide €20 million per month, covering the period from March to July 2026, which coincides with peak fuel use in agriculture.
Payments will be linked to fuel usage in the previous year, meaning those with higher fuel use receive higher supports.
Up to €5 million per month will be allocated for fishing and related sectors, with a tailored scheme for fishers developed in line with EU State Aid rules.
Explainer: What is green diesel?
Green diesel, also known as marked gas oil, is a lower tax fuel used mainly in agriculture, fishing and construction. It is not permitted for use in private vehicles.
How is this paid for?
From a budgetary perspective:
- The supports are temporary and targeted
- Costs are met through current expenditure, rather than long term spending commitments
- Fuel tax reductions reduce Exchequer revenue, while support schemes increase direct spending
Because the measures are time limited, they do not permanently increase the spending baseline, but they do affect the State’s in year fiscal position.
Why this matters
Fuel supports respond to immediate price pressures, but they also:
- Reduce tax revenue that would otherwise fund public services
- Raise questions about how the State responds to external price shocks
- Highlight trade offs between short term relief and longer term climate and fiscal goals
These are issues that fall within the oversight role of the Oireachtas.
Key takeaway
The fuel supports package combines tax reductions and targeted payments to cushion households and key sectors from sharp fuel price increases.
For the public finances, the measures are significant in cash terms but temporary in nature.
The role of the Parliamentary Budget Office is to support transparency by explaining how these measures work and where the costs fall.