There will be no one-off energy credits next year while increases in carbon tax will add around 2.5c to the cost of a litre of motor fuels from tomorrow.
Between April 2022 and February 2025, Irish households received nine credits to their electricity bills, worth €1,500 and costing the State almost €3bn.
However, as expected, Minister for Finance Paschal Donohoe confirmed in today's Budget that there would not be a repeat of those one-off measures to tackle the sharp rise in the cost of living, with the Government opting to "facilitate additional spending in targeted supports for the most vulnerable" instead.
Since 2021 the cost of electricity has jumped 69%, while gas has more than doubled (+102%). Average yearly electricity bills, which were hovering around €1,200 in 2021, will be close to €1,900 before the end of the year, after a raft of recent price increases from most suppliers, which will kick in this month.
The fuel allowance, which is paid to those over the age of 66 or in receipt of a qualifying social welfare payment from September to April, is to rise by €5 to €38 per week from January while families receiving the working family payment will now also qualify for the allowance.
A households benefits package providing €35 per month towards energy costs for pensioners and people in receipt of certain social-welfare payments has been maintained, and the reduced 9% VAT rate for gas and electricity bills will be maintained for the next five years.
Sinn Féin's finance spokesperson Pearse Doherty said the lack of energy credits was "shameful" on the part of the Government while Family Carers Ireland said that "the absence of energy supports this year will add further pressure on families already stretched to their limit".
Various charities welcomed the increase in fuel allowance and widening of eligibility, but Irish Rural Link said that would be offset by the rise in carbon tax, which has been increased by €7.50 per tonne of carbon emissions to €71 per tonne.
This new higher rate will be imposed on motor fuels, including petrol and diesel from midnight tonight and will add about 2.5c to the cost of a litre of petrol and diesel
From 1 May next year it will also be applied to all other carbon-based fuels, including coal, gas, home heating oil and briquettes.
The €5,000 VRT relief for electric vehicles has been extended until 31 December 2026.
Increases in the carbon tax every year out to 2030 were legislated for in Finance Act 2020. The target is to ensure the tax on carbon emissions reaches €100 per tonne by 2030.
This is to encourage people to transition cleaner fuels and help achieve Ireland's binding climate action targets.
The Government estimates that this latest increase in carbon tax will raise an addition €121 million for the exchequer next year, rising to €157 million in a full year.
Minister for Finance Pascal Donoue outlines carbon tax increases:
Irish Road Haulage Association (IRHA) president Ger Hyland welcomed the continuation of the diesel rebate scheme but said that fell far short of what is needed to secure the future of an industry under severe financial pressure.
"We asked for a fair and practical package to help hauliers survive rising costs and drive decarbonisation.
What we got was the bare minimum - simply keeping an existing measure in place. That's not progress, it’s standing still," said Hyland.
Kevin McPartlan, CEO of Fuels for Ireland, a national association of fuel providers, said: "The Government promised to cut energy costs, instead, it is increasing them.
"Irish motorists and businesses deserve a fair, honest look at why they are paying some of the highest fuel costs in Europe - and that is because Government has chosen to make them pay more.
"From midnight tonight, motorists will pay 2.5 cents more per litre because of higher carbon tax, and on 1 January 2026, changes to the renewable transport fuels obligation scheme will add another two to three cents per litre.
"This will be the first significant price increase since this Government came into office, adding €3 a litre on average to every fuel tank between now and New Year's Day. In the last administration, almost €15 was added to tanks. These increases are driven entirely by Government decisions and will affect every household and business in the country.
"As the association representing the sector which provides more than half of Ireland's energy, we are deeply disappointed that the Minister has not yet announced the establishment of an expert group to examine how taxation and other State policies are driving up fuel prices."
Meanwhile, the accelerated capital allowances schemes for energy efficient equipment, and for gas vehicles and refuelling equipment, is being extended for a further five years until the end of 2030.
The income tax disregard of €400 for income received by households who sell electricity from micro-generation back to the grid is being extended for a further three years to the end of 2028.
