Budget 2027: Government will cut carbon tax on home heating oil to minimum level, says Micheál Martin

Households using kerosene for home heating are set for a tax reduction in next week's budget, with ministers moving to ease pressure from rising fuel costs

There are restrictions on how much the carbon tax can be reduced due to existing derogations for the EU’s carbon emission trading system. Stock picture

The Government will cut carbon tax on home heating oil to its lowest possible threshold as part of Budget 2027 next Tuesday, Taoiseach Micheál Martin has said.

Speaking at a meeting of the Fianna Fáil parliamentary party on Tuesday evening, Mr Martin said the Government would be moving to reduce the costs of kerosene.

He told the party's TDs and senators that there are restrictions on how much the tax can be reduced due to existing derogations for the EU’s carbon emission trading system.

Multiple sources said the Taoiseach indicated the Government intends to cut the tax as much as possible without triggering a requirement to compensate the EU.

Sources at the meeting also confirmed the Taoiseach said he wanted to see a change to the income thresholds for social housing.

Mr Martin said the Government needed to ensure that working people were able to access social housing.

The Fianna Fáil meeting also saw discussions surrounding the pupil-teacher ratio in primary schools, with calls from Cork TD Seamus McGrath to make moves towards the 19:1 ratio as set out in the programme for government.

Budget 2027 will be announced on October 6.