Dáil Éireann Debate, Tuesday - 22 March 2022
233. Deputy Pearse Doherty asked the Minister for Finance the revenue raised through excise duty, carbon and non-carbon components, on home heating oil disaggregated by fuel type in each of the years 2017 to 2020. [14027/22]
View answer234. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue foregone through a reduction in excise duty to zero cent per litre for home heating oil for a period of one month, three months and until the end of 2022, respectively. [14028/22]
View answer266. Deputy Pearse Doherty asked the Minister for Finance the existing rate of excise duty, as defined by tax law, applied to kerosene used for home heating oil; if the duty rate can be reduced to €0 per 1,000 litres in accordance with the EU Energy Directive; and the cost of such a measure over a 3, 6 and 12 month period through revenue foregone. [14630/22]
View answerI propose to take Questions Nos. 233, 234 and 266 together.
Ireland's taxation of fuel is subject to European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. ETD provisions on mineral oils are transposed into national law in Finance Act 1999 (as amended). Finance Act 1999 provides for the application of excise duty, in the form of Mineral Oil Tax (MOT), to specified mineral oils, such as petrol, diesel, and kerosene, that are used as motor or heating fuels.
MOT is comprised of a non-carbon component and a carbon component. The carbon component is commonly referred to as carbon tax and the non-carbon component is often referred to as “excise”, “fuel excise” or “fuel duty”. In complying with ETD minimum rates, total MOT rates are taken into account. To clarify the position in relation to PQs 13696/22 and 13697/22 answered on 10th March, there was an incorrect reference to MOT in relation to kerosene. This should have read as the non-carbon component of MOT. While the non-carbon component is zero, there is a carbon component of MOT on kerosene, currently set at €84.84 per 1000 litres.
Under the ETD, the minimum rate of taxation on kerosene used for heating purposes is set at zero. While kerosene is the predominant oil used for heating, gas oil (diesel) is also used. Where gas oil is used for heating the ETD minimum tax rate is €21.00 per 1,000 litres. Kerosene used for heating purposes is marked red, and gas oil is marked green and is usually referred to as Marked Gas Oil (MGO) or green diesel.
The non-carbon component of MOT on heating kerosene is zero so the total applicable MOT comprises the carbon component (carbon tax) only. MGO attracts both components of MOT. On 1 May 2022, the basis of carbon tax applied to non-propellant fuels will increase from €33.50 to €41.00 per tonne of carbon dioxide emissions. Current MOT rates, and those applying from 1 May 2022, are given in the table below in euros per 1,000 litres. The breakdown rates for carbon and non-carbon components are also given, along with ETD minima.
MOT rate from 10 March 2022 MOT rate from 1 May 2022
|
Heating Fuel |
ETD Minima |
Carbon |
Non-Carbon |
Total MOT |
Heating Fuel |
Carbon |
Non-Carbon |
Total MOT |
|
Kerosene |
0.00 |
84.84 |
0.00 |
84.84 |
Kerosene |
103.83 |
0.00 |
103.83 |
|
MGO |
21.00 |
90.81 |
29.74 |
120.55 |
MGO |
111.14 |
27.03 |
138.17 |
When introducing MOT rate cuts earlier this month I ensured that the overall rate on MGO will, from 1 May 2022, be set at the 2021 level of €138.17 per 1,000 litres instead of the rate of €158.50 per 1,000 litres legislated for in Finance Act 2020.
I am advised by Revenue that the cost of reducing MOT on heating kerosene to zero cents per litre for periods of one month, three months, six months, until the end of 2022 and for one year are estimated at the amounts set out in the table below.
|
Period |
Cost €m |
|
1 month |
9 |
|
3 months |
19 |
|
6 months |
31 |
|
To end 2022 |
74 |
|
1 year |
114 |
I am further advised by Revenue that these estimates are based on levels of consumption in 2021, projected forward based on growth rates as anticipated by my Department in Budget 2022. Therefore, they may not fully reflect the current levels of uncertainty in the market for fuels.
MOT receipts, including both carbon and non-carbon components, for home heating oil (kerosene) for the years 2017 to 2020 are published on the Revenue website at: www.revenue.ie/en/corporate/documents/statistics/excise/net-receipts-by-commodity.pdf.
Current MOT rates for all mineral oils and vehicle gas are published on the Excise Duty rates page on Revenue’s website. Further details, including rates prior to 10 March 2022, are available in the Tax and Duty Manual on Excise Duty Rates on Energy Products and Electricity which is also published on Revenue’s website.
