Finance Bill 2026: Second Stage
Seanad Éireann — 2026-07-02
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Robert Troy (FF), Longford-Westmeath

I appreciate the opportunity to speak on the Bill on behalf of the Tánaiste and Minister for Finance. The Bill has been passed by the Dáil. It is relatively short and provides for some of the energy support measures introduced by Government in March and April to alleviate the impacts of energy price inflation owing to the disruption in the Middle East.
I will start by addressing the recent Government announcement to extend certain energy support measures, some of which are included in this Bill. As the House will be aware, on 30 June the Government announced an extension of the energy support measures, including reduced excise rates and increased repayment rate under the diesel rebate scheme. Committee Stage recommendations will be brought forward in this regard next week.
As we stated at the outset of our response in March, the Government is acutely aware of the impacts of energy price inflation on households and businesses. Our initial intervention was designed to provide immediate and substantive supports to households and businesses while providing time for ongoing monitoring of the situation and enabling us to adapt our response as needed. We have been agile in our response, intervening again in April to provide further temporary relief owing to the sustained impacts of the disruption in the Middle East on energy markets. We have continued this approach, actively monitoring developments and energy market activity before and since the agreement on the memorandum of understanding between the US and Iran. The agreement that has been reached between the United States and Iran to solidify their ceasefire and reopen the Strait of Hormuz is a very welcome development. Indeed, over recent weeks there has been a significant easing in wholesale energy prices, with spot prices for Brent crude oil currently standing at around $73 a barrel. In the context of recent wholesale prices which had peaked at around $120 a barrel in late April, this is a very welcome development. In terms of prices at the forecourts, there has been a steady decline in recent weeks, with current prices now, on average, around pre-conflict levels at around €1.76 per litre for both petrol and diesel. CSO figures show a tentative easing of inflation in June, with the headline rate of annual inflation moderating slightly to 3.3% and energy prices falling by 2% in the month. The Government expects a continued reduction in wholesale energy prices to pre-war levels to ultimately be reflected through lower fuel prices at the forecourts.
From a macroeconomic perspective, the Department of Finance identified three scenarios in its spring forecasts published in April; thankfully it appears that the risk of the most severe outcome is now receding. Of course, the situation remains uncertain and it is important to highlight we are very much aware of this. This is reflected in our policy approach which is providing for a cautious and gradual return to standard levels of fuel excise.
I will now speak to each section of the Finance Bill. The Finance Bill we are discussing today is the legislative basis for the tax elements of the energy support measures announced by Government to mitigate the most severe aspects of recent energy price inflation. Section 1 relates to the diesel rebate scheme. The diesel rebate scheme was introduced in 2013 to provide support for essential road users at times when the price of auto diesel was relatively high. The scheme provides qualifying road haulage and passenger transport operators with a partial repayment of mineral oil tax paid on auto diesel. In 2025, close to €39 million was paid out under the scheme, providing targeted support to the road haulage and passenger transport sectors. The diesel rebate scheme also provides support to the wider economy dependent on haulage as a distribution network. Households and other businesses benefit indirectly by virtue of reduced distribution costs. The amendment we are speaking to today provides for an increase in the repayment cap from 7.5 cent per litre to 12 cent per litre on a temporary basis.
As I have referred earlier in my speech, the legislation before us currently provides for this temporary enhancement to apply for fuel purchased between 1 January and 30 June 2026. However, we will extend this to apply until the end of September when we introduce the Government's amendments next week.
Section 2 provides for the current excise reductions of 30 cent per litre for auto diesel, 25 cent per litre for petrol and 5.4 cent per litre for green diesel. Taking the 2 cent per litre NORA levy reduction into account this brings the total reduction to 32 cent per litre for auto diesel, 27 cent per litre for petrol and 7.4 cent per litre for green diesel. The current text of the Bill provides for these reductions to apply until 31 July 2026. As mentioned earlier, following review and monitoring of the situation, and noticing the significant reduction in global oil prices, as well as pump prices, the Government has decided to extend the fuel excise reduction until 31 August 2026.
From 1 September 2026, there will be a gradual phasing out in four phases. On 1 September, there will be an increase of 7 cent per litre for petrol and 8 cent per litre for diesel; on 1 October, there will be an increase of 8 cent per litre for petrol and diesel; on 1 November, there will be an increase of 5 cent per litre for petrol, 7 cent per litre for diesel and 2.7 cent for green diesel; and on 1 December, there will be a final restoration of 5 cent per litre for petrol, 7 cent per litre for diesel and 2.7 cent for green diesel.
Separately, the Minister for Climate, Energy and the Environment is also providing for the extension of the NORA levy reduction until 31 August. A restoration of 2 cent per litre of the NORA levy will apply on 1 September for affected fuels such as petrol, diesel, green diesel and kerosene.
Section 2 also provides for the deferral of the planned 1 May carbon tax increase on certain mineral oil fuels, including kerosene, heating oil and marked gas oil. Sections 3 and 4 also deal with the deferral of the carbon tax increase for natural gas and solid fuels.
The decision to defer the carbon tax increase was made in recognition of the sustained higher level of inflation that marked gas oil, MGO, and kerosene, in particular, faced earlier this year. Similar to the pump prices for diesel and petrol, both MGO and kerosene prices have also reduced in recent weeks with both currently around €1.20 per litre. The deferral of the carbon tax increase provides additional relief from price pressures to consumers of these fuels as well as consumers of natural gas and solid fuels.
The decision reflects the Government’s continued commitment to balancing climate ambition with the need to mitigate the impacts on households and businesses from the energy price shock. The deferral of the carbon tax increase is a significant decision. This the first instance of such a delay since its multi-annual trajectory of carbon tax increases was introduced in the Finance Act 2020 and this decision was not taken lightly. Since the introduction of carbon tax increases in the Finance Act 2020, the Government has ensured that the revenues raised are purposefully recycled to fund the just transition measures. Accordingly, carbon tax revenues have been used to fund energy efficient upgrades in homes and communities, have supported decarbonisation across agriculture and transport and have underpinned measures such as the increases to the fuel allowance.
The reason we are all here today, to discuss these energy support measures, again underscores how important it is over the longer term that we transition away from fossil fuels. The Government is committed to supporting those most vulnerable to fuel poverty in the longer term by supporting the roll-out of a national retrofit programme. In budget 2026, the Government provided a record allocation of €640 million, of which €580 million is funded by the carbon tax, thus allowing us to target 73,000 home energy upgrades this year.
The latest data from the Sustainable Energy Authority of Ireland shows that we are delivering on this increased ambition. The data also shows that the retrofit sector is mobilising and responding to the growing interest in home energy upgrades underpinned by Government-funded SEAI grant support. The almost doubling of applications so far in 2026, year on year, means that the SEAI processed 29,000 applications from January to March. Among the most noteworthy increases are the more than 7,000 applications for window and door upgrades in a new grant that was introduced. There have been over 1,730 applicants for attic insulation, which is up 81% year on year; over 1,000 applicants for cavity wall insulation, which is up 62% year on year; and over 350 applicants for heat pump installations, which is up 95% year on year.
Since 2019, over 257,000 home energy upgrades have been delivered thanks to Government funding of over €1.7 billion. In total, €4.2 billion of carbon tax revenue has been allocated for expenditure on just transition and climate measures since 2020.
It is not possible to offset all of the increases in fuel prices that took place earlier this year using the tax system. These increases have been driven by market factors. Thankfully, these market factors have become more favourable in recent weeks. The measures which this Bill legislates for have provided significant mitigation support for households and businesses experiencing the most acute impacts of the increases in fuel prices earlier this year. Further mitigation has been provided through non-tax support such as the four-week extension of the fuel allowance scheme, which has benefited almost 500,000 households, and targeted schemes that support farmers, agricultural contractors, fishers, hauliers and coach operators.
As I said, this is a short but important Finance Bill. The Bill provides for a number of targeted tax changes and specific measures to support households and businesses. I am pleased to commend the Bill to the House.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/seanad/2026-07-02/debate/main
Retrieved: 2026-08-14T04:55:09+00:00
Sitting date: 2026-07-02