Quick answers
How much tax is on home heating oil in Ireland?
Kerosene, the usual home heating oil, carries three charges: carbon tax of 16.081c a litre, the NORA levy of 0.1c a litre and VAT at 13.5% of the whole price. On a typical 500-litre order at €824.00, that is €178.92 of tax, or 21.7% of the price.[2][17][21][4][5]
| Part of the price | Amount |
|---|---|
| Oil, delivery and the oil supplier's margin | €645.08 |
| Carbon tax (Mineral Oil Tax) | €80.41 |
| NORA levy | €0.50 |
| VAT at 13.5% | €98.01 |
| Price for 500 litres | €824.00 |
| Tax and levies | €178.92 (21.7%) |
The price is a published reference price, not a quote. Your oil supplier sets the delivered price. See kerosene prices by county.
How much is the carbon tax on kerosene?
€63.50 per tonne of CO2. Revenue charges that as €160.81 per 1,000 litres of kerosene, or 16.081c a litre, before VAT. On 500 litres that is €80.41, or €91.26 with VAT.[2][4]
How much carbon tax is going on kerosene after Budget 2027?
Less. On 6 October 2026, Budget 2027 cut carbon tax on kerosene from €63.50 to €48.50 a tonne until 2030, replacing the increase due on 14 October 2026. At €48.50, Revenue's kerosene rate is €122.83 per 1,000 litres, or 12.283c a litre: €21.55 less on 500 litres including VAT. Revenue had not published the date the lower rate starts when we checked on 9 October 2026.[19][20][15]
What is the mineral oil tax on kerosene?
€160.81 per 1,000 litres in Revenue's table from 15 April 2026. All of it is the carbon component; the non-carbon component on kerosene is €0.00. On kerosene, carbon tax and Mineral Oil Tax are the same charge, so do not add them together.[2]
What is the NORA levy?
A levy on oil sold in Ireland that pays for the National Oil Reserves Agency's emergency oil stocks. The levy is 0.1c a litre from 1 September 2026 to 31 October 2026, set by S.I. No. 446/2026. The standard rate in the NORA Act is 2c a litre, due back on 1 November 2026 unless the Minister makes another reduction order. On 500 litres that is €0.50 now and €10.00 at the standard rate, before VAT.[17][21]
What is the VAT on home heating oil?
13.5%, Revenue's reduced rate for heating oil. VAT is charged on the full price, including carbon tax and the NORA levy. To find the VAT in a price that already includes it, multiply by 13.5 and divide by 113.5. In a €824.00 order for 500 litres, that is €98.01.[3][4][5]
Rates checked 9 October 2026 against Revenue, the Department of Finance and the Irish Statute Book. More on the levy in the NORA levy explained.
Part of the tax on heating oil is there to make oil heating less attractive. The Government has said so openly.[1]
“the value in moving away from home heating oil because that will be expensive in 2030.”
Varadkar was talking about someone choosing a new heating system. In the same speech he acknowledged that the taxed fuels were essentials over which most people had little control, and proposed predictable increases with the revenue returned to citizens: long-term change, he said, not a penalty.[1]
So the rising price is meant to get you to replace your heating system, and until you can, you keep buying oil at that price.
What is in your bill?
Revenue's rate for home-heating kerosene is €160.81 per 1,000 litres, or 16.081c per litre. All of it is the carbon component of Mineral Oil Tax and the non-carbon part is zero, so on kerosene “carbon tax” and “Mineral Oil Tax” are the same charge.[2]
Heating oil carries VAT at the reduced rate of 13.5%, worked out on the full selling price including the carbon tax and levy. So you pay VAT on the carbon tax too.[3][4][5]
| Kerosene | Carbon tax before VAT | Including its associated VAT |
|---|---|---|
| 500 litres | €80.41 | €91.26 |
| 1,000 litres | €160.81 | €182.52 |
Carbon tax only. The calculator below adds the VAT on the rest of the price and the NORA levy.
The VAT inside a €700 quote that already includes VAT is not €700 × 13.5%. It is:[5]
€700 × 13.5 ÷ 113.5 = €83.26.
That already includes the VAT on the carbon tax, so adding it again counts it twice.
Budgets set carbon tax in euros per tonne of carbon dioxide and your docket is in litres. The calculator converts one to the other.
Your bill
Put your own numbers in
The €700 default is an illustration, not a live price. Enter your oil supplier's delivered total including VAT.
The reduced rate applies until 31 October 2026 under S.I. No. 446/2026; the standard rate is due back on 1 November. Source.
Illustration · 500 litres
€700.00
- Carbon tax Already inside Mineral Oil Tax
- €80.41
- VAT inside the total Not an extra amount to add to your quote
- €83.26
- NORA levy 0.1c/L until 31 Oct
- €0.50
The rest pays for the fuel, storage, transport and delivery as well as the oil supplier's margin.
Rates, assumptions and rounding
Dated basis reviewed 9 October 2026: 16.081c/L Mineral Oil Tax and 13.5% VAT. The NORA levy is the rate you select: 0.1c/L until 31 October 2026 or the standard 2c/L from 1 November. These inputs do not update automatically.
VAT inside an inclusive price is total × 13.5 ÷ 113.5. Each line is rounded to the cent before adding, so an oil supplier working from unrounded figures may be a cent out. This is an illustration, not a tax invoice.
How we got here: the political record
2009: a tax meant to change behaviour
Brian Lenihan introduced carbon tax in his Budget statement of 9 December 2009, at €15 per tonne of carbon dioxide. He argued that a price on carbon would change behaviour and encourage innovation, so changing behaviour was part of the stated case from the first day.[6]
2019: a higher price, announced in advance
Paschal Donohoe's Budget in October 2019 set a target of €80 per tonne by 2030, with a first step of €6. The extra revenue was ring-fenced for climate measures and for protecting vulnerable people, and the increase on heating fuels was held back until after the winter.[7]
Varadkar's Budget statement the next day tied the expected cost of fuel to decisions about heating systems, cars and living closer to work, with an explicit caveat about affordability.[8]
2020: ten years of increases, scheduled
On 13 October 2020 Donohoe raised the 2030 target to €100 per tonne. His Budget speech set out increases of €7.50 a year to 2029 and €6.50 in 2030, with the schedule to follow in the Finance Bill.[9]
A boiler installed now will still be running after several of those increases. Publishing them in advance is meant to change the sums when someone picks a heating system. It does nothing to pay for the new one.
2024: the case for investing sooner
At the Oireachtas Environment and Climate Action Committee on 15 February 2024, Donohoe again argued that a predictable, rising carbon price is a reason to invest sooner. He presented it as one part of a package with regulation, behavioural change and public investment, including support for vulnerable households.[10]
2026: the timetable slips
On 15 April 2026 Revenue confirmed that the carbon increases due on 1 May had been postponed to 14 October 2026.[15]
A Budget speech shows the direction of policy. What applies to your next delivery is whatever is in Revenue's table on the day.
Are households being forced off oil?
The policy puts deliberate financial pressure on fossil-fuel heating. A tax increase, a withdrawn grant and a legal ban are still different things. Calling all of them a ban is wrong, and so is calling the pressure an accident.[1][14]
For a household that can afford either of two suitable systems, a higher running cost on one tips the decision. A tenant who doesn't control the boiler, or an owner who can't finance a replacement, keeps the same equipment and has less money for everything else.
Building rules matter too. In January 2024 the Department of Housing reported that fossil-fuel boilers made up less than 5% of installations in new homes in the first three quarters of 2023, down from 79% in 2010 to 2014, and credited the nearly zero-energy building regulations introduced in 2019. Those figures cover new homes, not existing oil-heated houses.[13]
Since 1 January 2025, EU rules have restricted public financial incentives for new stand-alone fossil-fuel boilers, with some exceptions. The Commission's guidance says support for maintenance, repair and income support for heating can continue. Losing a grant for a new boiler doesn't oblige you to stop using the one you have.[14]
When a headline announces an oil-boiler ban, what matters is which of these it covers: new buildings, replacement installations, continued use or grant funding.
A future saving is not money in the bank
Take two households with similar oil bills. One owns its home, has savings and can arrange an upgrade. The other rents, or owns but has no spare cash and can't borrow more. The same tax increase reaches both. The first may be able to stop buying oil; the second may simply end up poorer.
ESRI research published in October 2019 modelled higher carbon taxes and found rural households particularly exposed, because of what they spend on heating and transport fuel. It also found that well-designed use of the revenue could reduce or offset those effects. These were modelled scenarios, not an audit of whether households were later compensated.[12]
Where does the money go?
Governments have said carbon-tax revenue will help households change how they heat their homes and protect people on low incomes. In the Budget 2024 statement on 10 October 2023, Donohoe announced €788 million available for investment, including €380 million for home energy efficiency and €262 million for social protection.[11]
Those are announced allocations. They don't show that every household paying the tax got an equivalent benefit, and a national scheme can fund real improvements while a particular household still can't afford the change it is being pushed towards.
The figures that would settle it are what was actually spent, which upgrades were completed, how long people waited and what they still paid. Spending announcements don't report them.
Who makes these decisions?
The carbon-tax increases described here were announced in Irish Budgets and given effect by Irish finance legislation. EU law separately shapes building standards and what public funding can support.[9][14]
What is coming next?
Budget 2027, on 6 October 2026, replaced the increase Revenue had postponed to 14 October 2026 with a cut: the rate on kerosene falls from €63.50 to €48.50 a tonne until 2030. At Revenue's €48.50 kerosene rate of €122.83 per 1,000 litres, that is €21.55 less tax on a 500-litre fill including VAT. Revenue had not published the start date when we last updated this page.[15][19][20]
The NORA levy, which funds Ireland's emergency oil stocks, stays at a reduced 0.1c a litre until 31 October 2026 under S.I. No. 446/2026, following the Government's announcement of 27 August. It is due to return to 2c a litre on 1 November, adding about €11 to a 500-litre delivery with VAT. The calculator shows both rates.[17][16][21]
Further out, the European Commission says ETS2 will be fully operational in 2028. It is a new emissions-trading system for fuels used in buildings, road transport and some other sectors. Fuel suppliers surrender the allowances, but the cost may still reach customers through fuel prices.[22]
The €45 figure you may see is a trigger for a price safeguard, in 2020 prices, not a guaranteed ceiling. What households pay will depend on the allowance price, how much suppliers pass on and how ETS2 interacts with Ireland's own carbon tax.[22]
Back to the tank
The aim of moving people off fossil-fuel heating is explicit. Whether the route is effective and fair is open to debate. A higher running cost strengthens the case for switching without giving every household the means to switch.
The practical questions
How much carbon tax is on 500 litres of kerosene?
At Revenue's rate of €160.81 per 1,000 litres, reviewed on 9 October 2026, 500 litres carries €80.41 of carbon tax before VAT, or €91.26 including the VAT on it. The bill also contains VAT on the rest of the price and the NORA levy.[2][4][5]
Is carbon tax charged on top of Mineral Oil Tax?
No. Carbon tax is part of Mineral Oil Tax. At the kerosene rate used here the non-carbon part is zero, so all of the Mineral Oil Tax is carbon tax. Adding the two would count the same charge twice.[2]
Is VAT charged on carbon tax?
Yes. Revenue includes taxes, duties and levies in the amount VAT is charged on. The VAT inside a €700 quote that already includes VAT is €700 × 13.5 ÷ 113.5 = €83.26, which already covers the VAT on the carbon tax.[5][4]
Does the 2025 boiler rule make my existing oil boiler illegal?
No. The EU rule restricts public funding for installing new stand-alone fossil-fuel boilers, with exceptions. It doesn't stop you using a boiler you already have. Rules for new buildings, rules on funding and restrictions on use are separate.[14]
When is the next carbon-tax increase on heating oil?
None is scheduled. The increase Revenue had postponed to 14 October 2026 was replaced in Budget 2027 by a cut to €48.50 a tonne, which the Department of Finance says applies until 2030. Revenue had not yet published the start date of the lower rate.[15][19]
Is the calculator a live quote or an official tax bill?
Neither. It uses the dated kerosene and VAT rates shown and the NORA rate you choose. The €700 default is not a live supplier price. Each line is rounded to the cent before adding, so an oil supplier who rounds differently may be a cent out.[2][17]
Sources, dates and how to check them
Speeches record what politicians said and are no evidence of whether a policy worked. The calculations use the rate tables. The household examples are illustrations, and comments on fairness are our own analysis.
- Leo Varadkar's parliamentary party speechFine Gael · 14 January 2019
Party-published transcript. Read the paragraphs about essential fuels, replacing heating systems and returning the revenue together.
- Mineral Oil Tax ratesRevenue · Table effective 15 April 2026, checked 9 October 2026
Kerosene used other than as a propellant: €160.81 per 1,000 litres, entirely the carbon component. These are dated inputs, not a live rate feed.
- VAT treatment of heating oilRevenue · Reviewed 9 October 2026
Identifies the reduced-rate treatment of heating oil.
- Current VAT ratesRevenue · Reviewed 9 October 2026
The reduced rate used in this guide is 13.5%.
- On what amount do you charge VAT?Revenue · Reviewed 9 October 2026
The taxable amount includes taxes, duties, levies and incidental expenses. Extract VAT from an inclusive price rather than adding it again.
- Budget Statement 2010: Brian LenihanHouses of the Oireachtas · 9 December 2009
Historical Budget record: the introduction of carbon taxation and the case made for it, not an evaluation of subsequent outcomes.
- Paschal Donohoe's Budget 2020 statementDepartment of Finance · 8 October 2019
The €80 ambition and ring-fencing commitments announced in 2019, before the subsequent €100 pathway.
- Taoiseach's Budget 2020 statementDepartment of the Taoiseach · 9 October 2019
Connects the intended price signal to heating, vehicles and living near work, with an explicit affordability qualification.
- Paschal Donohoe's Budget 2021 speechDepartment of Finance · 13 October 2020
Announces annual €7.50 steps to 2029 and €6.50 in 2030, towards €100 per tonne of CO₂. Later amendments still matter.
- Opening statement to the Environment and Climate Action CommitteeDepartment of Public Expenditure · 15 February 2024
The stated case for predictable carbon prices, investment and support; not an independent evaluation of results.
- Statement by Minister Donohoe on Budget 2024Department of Public Expenditure · 10 October 2023
Announced 2024 allocations: €788 million available for investment, including €380 million for home energy efficiency and €262 million for social protection.
- Recycling revenue can offset adverse impacts of carbon taxEconomic and Social Research Institute · 8 October 2019
Modelling of particular tax and revenue-recycling scenarios. Results are not proof that every household has been compensated.
- Fossil fuel boilers effectively phased out in new dwellingsDepartment of Housing · January 2024
Reported installations in new dwellings, not a conversion count for Ireland's existing housing stock.
- Guidance on ending public incentives for stand-alone fossil-fuel boilersEuropean Commission · 17 October 2024
Explains the 1 January 2025 funding restriction and exceptions, including repair, maintenance and previously granted support.
- eBrief 078/26: carbon-tax postponementRevenue · 15 April 2026
Postpones the carbon increases due on 1 May to 14 October 2026. A later decision could amend that schedule.
- Government approves extension in reductions in excise on petrol and dieselDepartment of the Taoiseach · 27 August 2026
Announcement of NORA relief through 31 October. S.I. No. 446/2026 gives it legal effect.
- S.I. No. 446/2026: NORA levy order (No. 3)Irish Statute Book · 1 September–31 October 2026
Reduces the NORA levy to 0.1c per litre from 1 September to 31 October 2026. The standard 2c rate is due to return on 1 November.
- S.I. No. 374/2026: temporary NORA levy orderIrish Statute Book · 1–31 August 2026
The August order. The September–October rate is set by S.I. No. 446/2026.
- Budget 2027 Tax Policy Changes, section 5.1: Carbon TaxDepartment of Finance · 6 October 2026
Carbon taxes on kerosene and natural gas will be reduced to €48.50 per tonne of CO2 until 2030. The document gives no start date for the lower kerosene rate.
- Tax and Duty Manual: energy products excise duty ratesRevenue · Document last updated April 2026
Kerosene was €122.83 per 1,000 litres from 1 May 2023, when carbon tax was €48.50 a tonne. That is the per-litre equivalent of the Budget 2027 rate.
- National Oil Reserves Agency (Amendment) Act 2026, section 1Irish Statute Book · 2026
Sets the standard NORA levy at €0.02 per litre and lets the Minister reduce it by order between 2 June 2026 and 31 December 2027.
- ETS2: buildings, road transport and additional sectorsEuropean Commission · Reviewed 13 September 2026
The reviewed timetable says fully operational in 2028. The €45 reference in 2020 prices is a safeguard trigger, not a guaranteed ceiling.
Cite this page
Tankful, “Tax on home heating oil in Ireland”, updated 9 October 2026. Permanent article link.
Tankful compares heating-oil prices; we are not a tax authority. Spotted an error or a newer official source? Tell us.