Rumoured fuel measures fall short as carbon tax hike looms, says Collins

Rumoured fuel measures fall short as carbon tax hike looms, says Collins

Independent Ireland leader Michael Collins TD has said that proposed Government measures to cut excise duty on fuel “do not go far enough” and warned that an impending increase in carbon tax will cancel out any short-term relief for households and businesses.

Reports that the Government is considering a temporary reduction in excise duty of up to a quarter — potentially lowering prices by around 30 cent per litre — have been broadly welcomed, but Deputy Collins said the limited duration of the measure undermines its impact.

“What is being proposed is, at best, a short-term sticking plaster,” he said. “Families and businesses are facing what can only be described as the worst fuel crisis in living memory. A one-month intervention, no matter how headline-grabbing, will not provide the certainty people need.”

Deputy Collins said it was “incredible” that, at the same time as offering temporary relief, the Government is pressing ahead with a further increase in carbon tax on home heating fuels.

The next increase, due to take effect on May 1st, 2026, will bring the carbon tax rate to €71 per tonne, impacting fuels such as kerosene, natural gas and coal.

“It is a case of giving with one hand and taking away with the other,” he said. “On the one hand, the Government acknowledges the severity of the crisis by cutting excise duty. On the other, it proceeds with a carbon tax increase that will push costs straight back up again — particularly for those relying on home heating oil.”

The Independent Ireland leader said the planned increase should be halted immediately.

“There is no justification for increasing carbon tax in the middle of an energy crisis. This is not the time for additional burdens on households, particularly in rural Ireland where alternatives are limited and people are already stretched to the limit.”

Deputy Collins also pointed to the scale of tax already being collected on fuels, noting that a significant proportion of the price at the pump is made up of State-imposed charges.

“The Government cannot continue to treat fuel as a revenue stream first and a necessity second,” he said. “Low- and middle-income earners, as well as small businesses and the haulage sector, are bearing the brunt of this approach.”

He called for a more comprehensive response, including a suspension of the upcoming carbon tax increase and a more sustained reduction in excise duty.

“What is required now is not a ‘short, sharp’ response that expires within weeks, but a coherent and lasting approach that gives people breathing space. Anything less risks deepening the financial pressure already being felt across the country.”

Deputy Collins concluded by urging the Government to reconsider its approach ahead of the planned changes.

“The reality is simple. If you increase carbon tax in May, you will undo much of the relief you claim to provide in April. That is not a solution — it is a contradiction.”