Dáil Éireann Debate, Tuesday - 30 April 2024
248. Deputy Cian O'Callaghan asked the Minister for Finance if he is aware that people and families, and notably older people, are struggling due to the increased costs of home heating oil; if he will introduce measures to assist people with these rising costs; and if he will make a statement on the matter. [19484/24]
Amharc ar fhreagraAt the outset, the Deputy should note that both I and the Government are conscious of the implications of fuel costs for all sectors of society.
This is reflected in the fact that in 2022 in light of the acute impact rising prices were having on households and business, the Government provided for excise rate reductions in the order of 21, 16 and 5.4 cent per litre on petrol, auto diesel and Marked Gas Oil (MGO) respectively. These temporary reductions were due to end initially on 31 August 2022 but following review and monitoring of fuel prices they were extended until February 2023 with a phased restoration beginning in June 2023, followed by a second restoration in September 2023. A final restoration of excise rates was due to take place on 31 October 2023 but in Budget 2024, I provided for a further extension until 31 March 2024 with a phased restoration occurring in two stages ; on 1 April 2024 and 1 August 2024.
In addition to rate increases related to reversing the 2022 Mineral Oil Tax cuts, increases to the carbon component rates of Mineral Oil Tax on kerosene, marked gas oil, and LPG are legislated to come into effect on 1 May 2024 when the amount charged per tonne of carbon dioxide emissions from non-auto fuels increases from €48.50 to €56.00. These rate increases which impact home heating oil are delayed until 1st May each year, until after the winter heating season.
While I recognise that households and business continue to face challenges, the Government must strike the appropriate balance between providing support and avoiding fuelling cyclical inflationary trends.
A number of factors affect the final retail price of fuels including energy market dynamics, wholesale pricing, individual retail pricing policy, transport costs, exchange rate fluctuations and taxation. While taxation affects the final retail price, amendments to tax rates cannot fully absorb price shocks given the larger impacts of energy markets, embedded costs as well as pricing policy at wholesale and retail level. The Government has provided relief to consumers and businesses since 2022 through a number of support measures including temporary reductions in excise. However, these measures were introduced as temporary support measures and involve an ongoing cost to the exchequer while they are retained. The Deputy should note that I will continue to monitor and review the position in the coming months in the context of the final phase of excise rate restorations due to take place in August 2024.
The carbon tax forms an integral part of the Governments response to the need to address climate change and forms part of the Programme for Government commitment to increase Carbon Tax over a 10-year trajectory with a view to reaching €100 per tonne of CO2 by 2030. A significant portion of carbon tax revenue is allocated for expenditure on targeted welfare measures and energy efficiency measures, which not only support the most vulnerable households in society but also in the long term, provide support against fuel price impacts by reducing our reliance on fossil fuels. Analysis undertaken using SWITCH, the ESRI tax and benefit model, to simulate the impact of the carbon tax increase and the compensatory welfare package has confirmed that the net impact of the combined measures is progressive. Households in the bottom four income deciles will see all of the cost of the carbon tax increase offset, with the bottom three deciles being better off as a result of these measures
The Deputy will be aware that the Department of Social Protection provides a number of supports towards the cost of heating a home to those who qualify.
These supports include the Fuel Allowance payment which is a payment of €33 per week for 28 weeks (a total of €924 each year) from late September to April, at an estimated cost of €384 million in 2024.
The Department of Social Protection also pays an electricity or gas allowance under the household benefits scheme. The Household Benefits package (HHB) is separate from the Fuel Allowance Scheme and a further €224 million will be spent on the scheme in 2024. The gas and electricity element is paid at a rate of €35 per month, 12 months of the year.
Furthermore, Additional Needs Payments may also be made to help meet an essential expense that a person cannot pay from their weekly income. Additional Needs Payment are available to anyone who needs it and qualifies, whether the person is currently receiving a social welfare payment or working on a low income.
Payments are made at the discretion of the officers administering the scheme, taking into account the requirements of the legislation, and all the relevant circumstances of the case in order to ensure that the payments target those most in need of assistance.
Any person who considers they may have an entitlement to an Additional Needs Payment is encouraged to contact their local community welfare service. There is a National Community Welfare Contact Centre in place - 0818-607080 - which will direct callers to the appropriate office. In addition, applications can be made online via www.mywelfare.ie.
