Budget 2027 heating oil: carbon tax on kerosene cut

In Budget 2027 on 6 October 2026, the Government cut the carbon tax on kerosene and natural gas from €63.50 to €48.50 per tonne of carbon dioxide, the 2023 level. The Department of Finance says it stays there until 2030; the Minister for Finance said it will not rise again for the lifetime of this Government. Before the Budget, the rate was due to reach €78.50 a tonne by May 2027.

Revenue's Mineral Oil Tax table, published on 15 April 2026, lists kerosene used other than as a propellant at €160.81 per 1,000 litres, all of it carbon tax. When the rate was last €48.50 a tonne, from 1 May 2023, Revenue charged €122.83 per 1,000 litres. That is €37.98 less tax per 1,000 litres before VAT, or €43.11 once the 13.5% VAT on it is included. The Government's Budget in Brief rounds this to €43 for 1,000 litres.

Revenue's eBrief of 15 April 2026 had postponed the increase due on 1 May until 14 October 2026. That increase will no longer happen for kerosene. The Budget speech gave no start date for the lower rate; we will add it when Revenue publishes it.

What the cut means by order size

The first two columns exclude VAT. The €48.50 column uses Revenue's 2023 kerosene rate until Revenue publishes a new table.

What it means for your next order

There is no carbon-tax reason to order before 14 October. Until Revenue sets a start date, a quote may still carry tax at €63.50 a tonne. Petrol and road diesel tax headlines do not apply to home-heating kerosene.

Common questions

How much does the Budget 2027 carbon tax cut save on heating oil?

About €21.55 on a 500-litre fill of kerosene and €43.11 on 1,000 litres, including 13.5% VAT. That is the tax difference only. Your oil supplier sets the delivered price.

When does the lower carbon tax on kerosene start?

Revenue had not published a start date or a new rate table by 7 October 2026, when its table still showed €63.50 a tonne. We will add the date when Revenue publishes it.

Is the 14 October carbon tax increase on home heating oil going ahead?

No. The increase on kerosene that was postponed from 1 May to 14 October 2026 is replaced by the cut to €48.50 a tonne.

How long will the carbon tax on home heating oil stay at €48.50?

Until 2030, according to the Department of Finance. The Minister for Finance said it will not rise again for the lifetime of this Government.

Did Budget 2027 change VAT on heating oil?

No. The Department of Finance's list of Budget 2027 tax changes has none for heating oil, so kerosene stays at 13.5% VAT.

For help with the bill itself, see our guide to heating oil grants and supports.