UKIFDA Comment on the Irish Budget

6th October 2026

UKIFDA (The Fuel Distribution Association), which represents a significant proportion of Ireland’s liquid fuel distribution sector, welcomes the relief provided by the Government in today’s budget, targeted at our customers, including home heating users and farmers.

Heating oil distributors purchase product at prevailing wholesale market prices on a frequent basis. As a result, distributors are largely price takers in an internationally traded market.

We recognise the impact that sustained high wholesale prices continue to have on many households and businesses. The industry remains committed to supporting customers, working with the government and promoting awareness of available support schemes, independent advice and practical measures that can help consumers manage energy costs.

While the relief announced today is welcome, the Government needs to recognise that VAT on heating oil is 13.5%, compared with 9% to natural gas used for home heating. This creates an unnecessary rural penalty as more rural homes use heating oil.

The industry proposed reducing VAT for heating oil to 9%. While it has been argued officially that this 9% VAT rate cannot be applied to heating oil due to the EU VAT Directive, it is now time to properly investigate a way of removing this inequality.

ENDS