Government Announces Measures to Reduce Energy Costs

The Government is conscious of the increased financial pressure on households and businesses arising from the ongoing conflict in the Middle East.

In response, the Government will introduce temporary and targeted measures to reduce fuel prices for households and businesses, with additional supports for key sectors of the Irish economy.

These measures provide for temporary reductions in the rates of Mineral Oil Tax (MOT) applying to petrol, auto diesel and Marked Gas Oil (MGO), taking effect from midnight tonight until 31 May 2026.

The rate of MOT will be reduced on a VAT inclusive basis by:

• 15 cent per litre for petrol,
• 20 cent per litre for auto diesel, and
• 3 cent per litre for MGO.

To provide targeted relief to haulage and bus passenger operators, the Government will increase the maximum repayment allowable under the Diesel Rebate Scheme, from 7.5 cent up to 12 cent per litre of diesel. This will apply to diesel purchased from 1 January 2026 until 30 June 2026.

To further ease the financial impact of energy price inflation, the Government will reduce the NORA levy from 2 cent per litre to a nominal amount for a period of two months.

In order to further support households, the fuel allowance season will be extended by an additional four weeks. This means that the 470,000 households in receipt of the fuel allowance will receive additional financial support of €38 per week, totalling €152.

These measures will be in place for a defined period of time and Government reserves the option to adjust its approach as circumstances evolve.

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.''

Tánaiste and Minister for Finance Simon Harris said:

"Today, Government is taking action to help households and businesses with the cost of fuel and energy.

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 in 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.

Such periods of volatility highlight Ireland's relative strengths. Solid budgetary management in recent years means we now have the capacity to respond in a timely and targeted way to help those most affected by this energy price shock. This conflict is also a reminder that we must accelerate our transition towards energy independence.

Government will continue to assess the economic impact as it evolves, and my Department will publish a full set of economic and fiscal forecasts in the coming weeks."

Minister of State at the Department of Transport with responsibility for International and Road Transport, Logistics, Rail and Ports, Seán Canney said:

"These are practical, immediate measures that will make a real difference for people right across the country.

People are feeling the pressure every time they fill their car, heat their home or try to keep a business on the road. Today's package is about easing that burden in fair and timely way.

The reduction in fuel costs at the pump, combined with the extension of the fuel allowance, will help around 470,000 households manage in what is a very uncertain period.

Importantly, we are also supporting our haulage and passenger transport sectors through the enhanced diesel rebate. These sectors are the backbone of our economy and keeping them moving is critical.

While these measures are temporary, they are designed to give people breathing space now, while we continue to monitor the situation and respond as needed.

We also need to look at the bigger picture and the future - we are supporting the transition to sustainable and renewable energy with many schemes like our retrofitting schemes. We need to continue to incentivise people and businesses to continue that transition."

Minister for Climate, Energy and the Environment, Darragh O'Brien said:

"This Government understands the pressures that households and businesses are under, and we have responded today to the areas under the most acute pressure. This targeted intervention is time-bound, and we will continue to monitor and review the ever-evolving nature of this situation.

In relation to the haulage sector, I, and my Government colleagues, recognise the importance of the sector and the challenges that have faced due to the recent increase in fuel costs. This is a critical sector that plays a crucial role in keeping supply chains and the wider economy moving. The package of supports reflects the issues raised by the haulage industry and will have a direct impact on the cost of fuel at the pump. I remain committed to working with the haulage sector and will meet frequently with their representatives as the situation develops.

More broadly, this situation underlines, once again, why we must accelerate the deployment of renewables across all sectors, continue to invest in our grid, and continue to invest in retrofitting of homes and businesses across the country. We will not insulate ourselves from future price shocks unless we reduce our dependence on imported fossil fuels. The Government is committed to doing that in a way that protects households, businesses and the economy."

Minister for Social Protection, Dara Calleary said:

"We know that many people and families are facing higher energy costs at the moment as a result of the conflict in the Middle East.

The expansion of the Fuel Allowance season is a targeted, practical intervention that will help those who need it most.

Around 470,000 pensioners, working families and other long-term social welfare recipients will receive additional financial support of €38 per week until May 1st, totalling €152.

This builds on the recent expansion of the Fuel Allowance to Working Family Payment recipients, which was backdated to 1 January 2026 and an increase in the Fuel Allowance to €38 per week from 1 January 2026.

As Minister for Social Protection, I will continue to work to support vulnerable households who face financial challenges."