Government to oppose Sinn Féin motion to scrap carbon tax from home heating oil

SINN FÉIN IS tabling a motion in the Dáil today that would remove carbon tax from home heating oil. 

The average cost has risen by nearly 80% in the past year, following the US and Israel’s war on Iran, and now one in seven households are in arrears.

Pearse Doherty, Sinn Féin’s finance spokesperson, says their Bill would reduce the price of 1,000 litres of home heating oil by €183. 

He told RTÉ’s Morning Ireland that this is the eighth time since March that the party has brought forward such a proposal. Government TDs have indicated they’ll vote against it, but it’s possible that such a measure will be introduced later this year.

Fine Gael TD John Clendennen said bringing the idea forward just “a couple of weeks out” from the announcement of next year’s budget “is political theatre”.

“If Sinn Féin were serious about this today, we’d have an alternative budget on the table, and we’d be able to look at everything in the round,” he said.

He said the government must reduce “financial disappointment”, while supporting “working people”, which he says will be achieved through the mooted income tax package.
CheapestOil.ie’s price tracker shows the average price nationwide has soared from €463 per 500 litres this time last year, to €828 today. That’s a 79% increase. The price comparison websites build their prices from what is charged by local suppliers around Ireland.

More than a third of Irish households depend on oil for heating.

Taoiseach Micheál Martin said last week that the government is “looking at doing something there” in relation to the cost of home heating oil. 

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“As I said, we’re discussing everything in the round. We’ve 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, because we’ve looked at the figures, in terms of the impact is particularly significant there,” he said.

Asked on air today whether the carbon tax will be scrapped in the budget, which will be revealed on 6 October, Clendennen again said the government “has to look at everything in the round”.

“Certainly carbon tax is something we need to look at and review, but we need to look at things from a holistic perspective,” said Clendennen.

“If you wanted to see a reduction then you wouldn’t be voting to keep these taxes,” Doherty told him.

Doherty said home heating oil is the only fuel where tax could legally be scrapped. Under EU law, other fuels such as petrol and diesel must be taxed.

Currently, money raised through carbon tax is ring-fenced and goes towards energy upgrades, the home retrofitting scheme and targeted social welfare supports.

Doherty claims that in their alternative budget, Sinn Féin will show that these projects would still be funded, but not by carbon tax.

Another option to cut prices, which has been suggested by industry group Fuels for Ireland, is to reduce the VAT rate on home heating oil (currently 13.5%) and bring it in line with the 9% rate on gas. 

It is unclear exactly what approach the government might take.