Government signals tax cut on home heating oil in Budget

Taoiseach Micheál Martin has signalled that the Government could cut tax on home heating oil in the upcoming Budget.

Speaking at the National Ploughing Championships in Screggan in Co Offaly, Mr Martin said the Government was "discussing everything in the round" and were "looking at doing something there" in relation to the cost of home heating oil.

The Government has two options when it comes to reducing the cost of home heating oil.

It can lower the carbon tax on kerosene, something Sinn Féin is expected to introduce legislation on in the Dáil next week.

Alternatively, it could equalise the VAT rate charged on home heating oil, which is currently 13.5%, with the 9% levied on gas.

"I think we're more or less focused in on the idea of decoupling that kerosene issue and making sure that we give alleviation to people in their homes, in particular home heating, over the winter period," Mr Martin said.

"Because we looked at the figures in terms of the impact that was particularly significant there, and yes, we are looking at doing something there."

Figures from the Central Statistics office last week showed home heating oil prices up 44% over the past 12 months, while petrol prices rose by 9% and diesel jumped by 15%.

Mr Martin also said the upcoming Budget will take into account the impacts of fuel and energy prices, ahead of fuel supports unwinding from 1 November.

This morning, the Irish Road Haulage Association (IRHA) said the Government were "fooling themselves" if they believed fuel prices will have fallen before that date.

However, Mr Martin said the Government knew the situation had "not taken a turn for the better" and that the Budget would provide an opportunity to "take pressure off people".

"We know the situation has not taken a turn for the better because of what's happening in the Hormuz Strait, and indeed in terms of other trading routes because of war and conflict and so forth, so we're very conscious of that."

'We can't insulate people fully from energy costs' - Harris

Tánaiste and Minister for Finance Simon Harris also repeated his intention to lower the cost of home heating oil.

Speaking at the Ploughing Championships in Co Offaly he said: "We can't insulate people fully from energy costs, but the energy costs aren't levelled equally on all citizens.

"There are some people, they're disproportionately older people, they're disproportionately low-income families, they're disproportionately in rural Ireland, who are really feeling the pinch when it comes to the cost of filling home heating oil."

He added: "We'll also have to make some broader calls around petrol and around diesel, and trying to provide people with some degree, some degree of a roadmap or certainty in terms of energy fuel excise for the time ahead in a very, very uncertain world."

Minister for Public Expenditure Jack Chambers also confirmed that measures to respond to the price spike in home heating oil are under consideration in the Budget.

Speaking at an informal meeting of Cohesion Ministers in Dublin today, Minister Chambers said they are specifically seeking to respond to the issue in relation to kerosene.

"We have made specific interventions when it comes to fuel and the reduction in VAT on certain energy products. So we are specifically seeking to respond to that issue in relation to kerosene and to home heating oil in a budgetary context and we are looking at the mechanism to do that presently because we acknowledge the huge price spike that is there and the need to support families."

Minister Chambers said the issue will be "considered in the context of the tax package overall so it does not have an impact on the expenditure number in terms of broader consideration where there is pressure across Government".

"But I think we have been very clear, we want to make a difference when it comes to the cost of living and energy prices are a specific issue for so many families and that's why we have identified home heating oil as a specific issue that we should respond positively towards and we specifically seeking to design a mechanism to do that so that people have some insulation from the price spike that we have seen presently," he said.

Earlier, the Irish Road Haulage Association called for the Government to subsidise biofuels that can be produced within the EU.