Pearse Doherty (Donegal, Sinn Fein)
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5. To ask the Minister for Finance if he has considered reducing excise duty as it applies to home heating oil in accordance with the excise directive; and if he will make a statement on the matter. [21564/22]

Pearse Doherty (Donegal, Sinn Fein)
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Last night, the Minister of State and his colleagues voted on a Sinn Féin amendment that would have removed excise duty from home heating oil on a temporary basis. He and his colleagues in the Government voted against it. It was a major mistake. Removing excise duty from home heating oil would have reduced the cost of a tank fill by more than €100 and cost less than €74 million were it removed until October. The Government's refusal to do so was ideological and nothing else. Will the Government reconsider and commit to examining this measure?

Seán Fleming (Laois-Offaly, Fianna Fail)
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As the Deputy said, we had a discussion on this issue last night. It is no harm to revisit the matter here. It is important to do so on this occasion. Ireland's taxation on fuel is governed by European Union law as set out in Directive 2003/96/ED, 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 the Finance Act 1999, as amended. This Act provides for the application 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.

Kerosene used for heating purposes attracts a reduced rate of MOT which is comprised entirely of a carbon component. The ETD minimum rate of taxation on kerosene used for heating purposes is set at zero. When introducing the ten-year carbon tax trajectory in 2020, the Minister deliberately scheduled rate changes on heating oil to come into effect at the end of the heating season. Therefore, the next scheduled increase in the carbon component of MOT on non-propellant fuels, such as kerosene, will come into effect on 1 May.

As the Deputy will be aware, the carbon tax trajectory is a key element of the Government's decarbonising strategy. The Government remains committed to the important signal that maintaining the carbon tax trajectory sends to society. I note that due to recycling of carbon tax revenue for investment in energy efficiency measures and targeted welfare payments, the carbon tax has been recognised as a progressive policy supporting climate policies. Therefore, the Minister does not intend to reduce the carbon component of MOT applied to kerosene.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister of State might be aware that he and some of his colleagues are involved in a deliberate campaign of misinformation. Indeed, it is right out of the Trump playbook. Fine Gael representatives online, on radio and on television have all claimed no excise duty applies to home heating oil. I suspect this was done to distract households who use home heating oil, and those who are struggling with the price increases they have seen, from Government inaction. It is untrue. Excise duty is applied to home heating oil at a rate of €84.84 for 1,000 l and will rise on Sunday, 1 May, to €103.83 for 1,000 l. Under the European excise directive, this could be reduced to zero. The Minister of State has admitted that. This would reduce the cost of filling a tank by €118 when VAT is included.

Why does the Minister of State believe that we should not reduce the burden on these households when the price has increased by 127% in the past 12 months? Why does he believe that we should actually increase the burden on these very same households on Sunday evening?

Seán Fleming (Laois-Offaly, Fianna Fail)
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Carbon tax is part of Ireland's overall decarbonisation policy. Nobody likes a tax, but we cannot on the one hand support all the climate change measures and on the other oppose the inclusion of carbon tax as part of that programme. While the financing side of it is always the hard bit, people agree with the principle. We cannot implement our principles unless we raise the revenue to do so.

In the context of the increases in consumer prices in recent months, in February the Government approved a package of measures to the value of €505 million, including an energy credit of €200 including VAT, to mitigate the impact of increases in the cost of living. The key drivers of these inflationary pressures are as a result of global energy supplies. Everybody will be aware that the packages announced in the budget earlier this year, and this week, add up to approximately €2 billion in total. These are compensatory measures for the increases that are coming through relating to carbon tax, which will be fully offset by the various measures the Government has introduced.

Pearse Doherty (Donegal, Sinn Fein)
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The price of home heating oil is the single largest increase on goods and services in this State in the past year. That is what is happening. With that information, the wise men and women in Government have said, "You know what we should do? We should increase it further on Sunday. Let us put another €20 on the cost of filling your tank on those hard-pressed workers and families." I am making the point that the Government has the ability under EU law, with no restrictions whatsoever, to reduce the cost of filling a tank by €118 by Sunday. We can do that on Sunday night. We can change direction. Instead of the Government putting it up, we can reduce that cost on a temporary basis. To do that until October would cost us €74 million, which is well affordable.

The second point is that no tax is hypothecated in this State under law. No tax is ring-fenced for any purpose. The Government should stop this nonsense that if a carbon tax on home heating oil is reduced to take the pressure off workers and families, we will somehow be penalised in respect of a just transition, or a retrofitting programme and so on, because it simply does not stack up. This is ideological. This is a Government that is completely out of touch, that has seen the largest price increase in energy in this State on a certain oil and has decided its response will be to increase the cost of that oil further. This is daft stuff and the Government needs to change direction.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I hear what the Deputy is saying, but the collection of carbon taxes is a key ingredient of our climate plan. It is no good having a plan unless we raise some money to cover it. I understand the technical point the Deputy made but, in an overall context, there is no point in having a plan to reduce carbon emissions and then saying we will not have any tax specifically for that purpose. It is important that the people know they are contributing. The majority of people generally support the moves to decarbonise Irish society and the move to renewable energy, especially offshore wind, and solar, but they know it costs money. They know we have to raise taxes. To do everything the Government does we have to raise taxes. I understand the point the Deputy made and that is why we have had a series of measures to mitigate the cost of what is coming in on 1 May.