Heating costs to drop as duty halved

Heating oil: Householders should benefit from a €10 to €16 reduction in the cost of 1,000 litres of home heating oil from today, following a 50 per cent reduction in excise duty in the Budget.

Excise duty will fall from €31.74 to €16 on kerosene and €20.86 to €10 on liquid petroleum gas per 1,000 litres.

Minister for Finance Brian Cowen plans to eliminate excise duty on both fuels in the 2007 budget.

Mr Cowen said he was making the reduction to account for the "sizeable gap" in heating oil costs between the Republic and Northern Ireland.

"I plan to eliminate the excise difference between the two jurisdictions in the next two years, starting today," he said. The measure is projected to cost €1.5 million for the remainder of this year, €24 million in 2006, and €46 million in 2007.

Maxol said the measure would have a direct impact on consumers' heating costs. "Considering that consumers have had to bear the brunt of high oil prices in the past year the Minister's decision to reduce excise duty on heating oil with immediate effect is very welcome," chief executive Tom Noonan said.

Other main excise and Vat rates will not change, Mr Cowen said, to keep inflation down and to secure further value for money for the consumer. "On top of this, the consumer can look forward to lower retail prices for basic grocery items due to the removal of the grocery prices order."