Written by: Briain Kelly
Reading time: 4mins
The government has today confirmed a number of measures that will be taken to try and limit the impact of rising oil and gas costs in recent weeks.
The packet of measures confirmed today include a reduction on fuel excise duty, and extension of the fuel allowance,
However, the government has also emphasised that these measures will not be enough on their own to shield Ireland’s economy from the impact of the war, and that
Taoiseach Micheál Martin said, “As a Government, we are very mindful of the challenges being faced by increasing fuel costs and remain fully committed to supporting those most at risk.
“Today’s measures will help shield households and businesses from the recent unprecedented hikes in fuel prices.”
“We are making interventions to reduce the price at the pump for all, to protect our most vulnerable, and to support our haulage industry, as a critical enabler of our economy.”
“More broadly, we are making crucial investments in renewable energy, in our electricity grid and, importantly, in energy efficiency.”
Moving away from fossil fuels is key to reducing the impact of the current crisis and future crises.”
“We are continuing to monitor the situation and will respond accordingly as the need arises.”
Reduction in Fuel Excise
One measure which is being taken to reduce the cost of fuel at the pump is to slash the excise duty on petrol, diesel, and marked gas oil.
This reduction will come into effect at midnight tonight, and remain in place until May 31. The reduction has been set at the following levels.
This will affect prices at the pump at different times based on how large and busy filling stations are. Excise duty is paid on fuel at the time of its purchase by the filling station. This means lower prices won’t be passed on to customers until filling stations are using fuel bought from Wednesday onwards.
The National Oil Reserve Agency (NORA) levy is also being cut from 2c per litre to a “nominal amount” for a period of two months.
While these measures may help to tame inflation in fuel costs, the price at the pump will likely still remain higher than it was a month ago, especially if the war continues into the summer.
Tánaiste and Minister for Finance Simon Harris said, “We are reducing excise on petrol and diesel. When taken with a reduction in the NORA Levy, that means 22 cent off a litre of diesel and 17 cent off a litre of petrol.”
“We are also conscious that people are worried about the cost of home heating oil. That’s why we are extending the fuel allowance season by a further four weeks – helping the likes of our pensioners, carers, people with a disability and low-income working families.”
“It’s also really important we help sectors of our economy most impacted by the rise of fuel costs, such as our hauliers, bus and coach operators. That’s why we are expanding the diesel rebate scheme and backdating it to January.”
“The measures that we are introducing today are a direct response to the worrying conflict in the Middle East, a conflict that we all hope can be brought to an end.”
“We will navigate this period of volatility. But, to put it bluntly, nobody knows what the situation will be in a month from now; we must remain flexible in our response.”
Winter Fuel Allowance Increase
The winter fuel allowance is also included in the cost of living measures being implemented from today.
Rather than its value being raised, the period of the fuel allowance is being extended for another four weeks. Normally ending in mid-April, the fuel allowance will now continue until early May.
This means that the 470,000 households in receipt of the fuel allowance will receive additional financial support of €38 per week, totalling €152.
The fuel allowance is used to help lower income households and those receiving certain benefits with the cost of heating during the winter months.
No New Energy Credits
It was confirmed ahead of time that there will be no reintroduction of the energy credits, which were previously used to support household electricity costs, which skyrocketed after the COVID pandemic and the invasion of Ukraine.
These energy credits were introduced in late 2022 and continued until last year in varying sums. However, they were scrapped last year, with no new credits introduced in Budget 2026.
This lack will be felt at a time when people are already feeling the pinch from the high cost of living. With the likelihood of prices for electricity to increase further over the spring and summer, people will be feeling the impact of this turbulence, without a safety net.
War Sees Fuel Prices Rise
The war in Iran has seen the price of oil and natural gas skyrocket in the past few weeks, as the Strait of Hormuz has been closed to the vast majority of traffic.
Almost 25% of the world’s oil supply and 20% of its liquified natural gas travels through the straits, which oil producing gulf countries use heavily for tanker traffic out of the Persian Gulf.
The war has also seen increasing attacks on gas and oil production and storage facilities, which will further impact supply and pricing even once the straits reopen.
The price of a barrel of Brent Crude, commonly used as a benchmark for oil prices, has gone up from approximately $70 a barrel in February to over $100 since the war began.
Most of Ireland’s natural gas comes from the Corrib Oil Field or interconnection with the UK. However, it is not clear what the knock-on effect the war has had on international gas prices will have on Ireland.
Will Electricity Prices Increase?
Households may also see their electricity and heating bills go up as a result of this war in the near to mid future as energy prices increase.
Ireland still relies heavily on gas for electricity generation, with domestic gas plants accounting for 37% of all electricity generated in February. Another 14% of electricity was supplied from abroad via interconnection, which can include fossil fuel production.
The price of gas in Ireland is based on the marginal cost of gas imported from the UK. This leaves us vulnerable to shocks in the market, such as war interrupting supplies.
Gas prices in Europe have been highly volatile, whipping up and down based on the latest news coming from the Middle East. This makes it extremely difficult to predict how electricity will be affected.
Prices for electricity have increased steadily in recent years, despite some dips, and were already likely to increase further in 2026, even without the effects of the war, due to increased spending on infrastructure and the transition to renewables.
Several electricity companies have already substantially reduced the discounts they offer to new customers and eliminated welcome credits used to attract them.
