No help for households if petrol prices keep soaring
Two supertankers U-turned in the Strait of Hormuz on Monday amid fears Iran could disrupt the global oil trade by closing the passage in response to US strikes.
The crisis could send oil prices spiralling depending on which way the situation plays out, a leading economist warned. Crude prices on Monday had jumped more than $10 a barrel to almost $72 since early May – up more than 16% in little over a month. Taoiseach Micheál Martin has downplayed the prospect of new cost-of-living measures in the Budget. Pic: Leah Farrell/RollingNews.ie
The crisis has already added around 9c to a litre of petrol and 8c to diesel at the pumps, sending petrol prices to almost 180c a litre and diesel to around 174c. Kevin McPartlan, chief executive of Fuels for Ireland (FFI), said fuel prices 'are rising sharply across Ireland, not due to domestic policy decisions, but because of escalating global tensions and energy market volatility'.
He said: 'Even before the US launched its latest actions in Iran, wholesale prices had already surged by 9c per litre for petrol, 8c for diesel and 7c for kerosene. Those are wholesale prices, before VAT, excise duty, or any retailer margin is applied.'
The Government has already ruled out cost-of-living measures such as energy credits in the October Budget. The Taoiseach on Monday signalled the Government is not minded to change course, despite the situation in the Middle East. Fears are growing over a spike in petrol prices and inflation as a result of the conflict in Iran. Pic: Shutterstock
He said: 'We have identified housing, disability and child poverty as key priorities of the Budget, and these are issues that I'm certainly wedded to, but also doing it in a core budgetary manner.
'The challenge with once-off [payments] is it wouldn't be core or long term or sustained. The closure of the Strait of Hormuz would be very, very serious globally, although it would damage everybody, including Iran.
'It may not happen because of that very reason that it's mutually destructive to everybody. The crisis could send oil prices spiralling depending on which way the situation plays out, a leading economist warned. Pic: Shutterstock
'That is why we do need to return to the diplomatic table… Because that is the danger with a war of this kind, that it can continue and it can lead to other acts which will ultimately be damaging to humankind.'
It was unclear what caused the two empty ships to head south, away from the mouth of the Persian Gulf. The Strait of Hormuz is a Gulf pinch point and means tankers must sail close to Iranian waters but the Iranian parliament was reported to have backed a move to close the Strait, threatening around a fifth of all global oil movements. The closure would threaten shipments from Persian Gulf countries, likely further spiking prices.
Ireland imports 100% of its fuel and is vulnerable to any movements in oil prices.
'Approximately 20% of the world's oil passes through the Strait of Hormuz, a strategic choke-point now at risk,' Mr McPartlan said. The crisis has already added around 9c to a litre of petrol and 8c to diesel at the pumps, sending petrol prices to almost 180c a litre and diesel to around 174c. Pic: Shutterstock
'Fuel retailers in Ireland are not setting prices arbitrarily. When fuel prices go up, so does the State's tax take automatically. This underlines the urgent need for a comprehensive review of how fuel for heating and transport is taxed. We are calling on the Minister for Finance to establish a group of experts to undertake this review as a matter of urgency.'
Irish Petrol Retailers Association (IPRA) spokesman David Blevings said 'the real fear is an escalation of violence that could see refineries targeted or supply lines hit that would have an impact on global supply lines'.
Economist Austin Hughes said: 'We do know which way it's going to go, but we don't know how far it's going to go.
'It's very difficult to see a scenario in which risk profiles don't push energy prices higher into the autumn and winter… Unless it becomes abundantly clear the strike at the weekend was the final act…' As Iran does not have a 'squadron of bombers ready to retaliate' there will probably be 'some sort of terrorist attack or other disruption', he warned. Oil prices jumped more than 4% early yesterday and Dutch and British wholesale gas prices also rose.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Times
33 minutes ago
- Irish Times
‘Grave concerns' over Government's rush to adopt new EU migration plan, rights watchdog says
The largest overhaul of the immigration and asylum system in a generation could end up mired in legal challenges, administrative dysfunction and human rights violations, the State's human rights watchdog warns. The Irish Human Rights and Equality Commission (IHREC) has 'grave concerns' about the speed with which the Government is moving to implement the EU Migration and Asylum Pact, the lack of consultation about and scrutiny of it, and potential human rights infringements, particularly of children, as detailed in an analysis published on Tuesday. The pact, which Ireland opted into last year and which must be enacted by June 2026, aims to streamline migration and asylum law across the EU , making it easier to process asylum applications and faster to identify failed applicants. It will see increased biometric data gathering and co-ordination between states. READ MORE Complying with the June 2026 deadline will necessitate transposition of six detailed EU acts and alignment with two more, says IHREC. It will mean tougher border security checks, with biometric data gathered from asylum seekers – including children – and shared with other EU states' quicker processing of applications and accommodation in new 'border management' centres. In some cases asylum applicants will have their movements restricted, though Government insists they will not be accommodated in detention centres. The commission has concerns under several headings, including that people will be held in 'de facto detention'; that children whose age is disputed will be processed as adults; the treatment of human trafficking victims; discrimination against applicants with no or limited digital literacy; and limitations on access to legal advice and representation. The more than 200-page general scheme of the International Protection Bill 2025 says the Pact will 'broaden the circumstances under which an individual can be detained', says the commission. [ Asylum seekers: Numbers seeking international protection in Ireland fell by 43% this year Opens in new window ] 'This includes the power to arrest and detain applicants without a warrant if they refuse to travel to screening centres, with no absolute time limit on this detention. The provisions also allow for the arrest and detention of children without a warrant. 'Though the Bill commits to minimising detention, the Commission is deeply concerned about the introduction of measures – such as biometric reporting and electronic surveillance – that will constitute de facto detention.' It says 'limitations on access to legal advice and representation' during the initial stages of asylum application 'will likely be the subject of legal challenge for their compliance with the EU Charter of Fundamental Rights'. There is a 'lack of clarity on age assessment procedures under the proposed legislation'. The commission warns 'children wrongly assessed as adults could be subjected to the fast-track border procedure', potentially endangering their rights as minors. Liam Herrick, chief human rights commissioner, said: 'This is a once-in-a-generation overhaul of our asylum system. We must get it right. [ Third of asylum seekers entering State this year subject to a fast-track decision-making Opens in new window ] 'In our analysis of the current draft proposals, the commission believes the State is in danger of introducing a system that fails to respect and vindicate the fundamental rights of international protection applicants. 'The proposals regarding detention of asylum seekers, access to legal representation and counselling, and the treatment of children and vulnerable people give rise to particular concerns. 'While the commission recognises the complexity and challenges facing the State in implementing the Migration Pact, we also believe that many aspects of this General Scheme are impractical and may lead to the new system becoming mired in litigation and uncertainty.'
Irish Times
33 minutes ago
- Irish Times
Budget boosts of up to €1,000 per person dropped as Ministers seek era of restraint
The complete elimination of one-off payments and a sharp reduction in current spending growth are likely in this year's budget, as payments that have benefited the average worker by about €1,000 each are pulled back, according to several people involved in the process These two elements, plus a significant boost to capital spending, are likely to form the basis of a restrained budget in the face of economic uncertainty. Discussions between Minister for Finance Paschal Donohoe and Minister for Public Expenditure Jack Chambers and the Taoiseach and Tánaiste continued last night at Government Buildings. They also considered the State's response to the threat of 30 per cent tariffs on EU exports to the United States. Sources insisted that the elimination of the one-off payments of recent years – in the shape of energy credits and double welfare and child benefit payments – has been agreed by Government leaders, though they also say this will entail significant political difficulty for the Coalition. Moreover, it is likely to be challenged internally as the budget approaches. READ MORE There is also wide agreement that the increases in current spending of 8 to 9 per cent in recent years will be reduced significantly, perhaps towards 5 per cent, though this will have implications for budgetary questions such as the increase in welfare rates. The policy of spending restraint is likely to be central to the summer economic statement, which is due to be published next week. The statement is usually delivered at the start of July, but has been delayed by internal wrangles and uncertain global outlook, further evidenced by US president Donald Trump's threat of tariffs over the weekend. There is also certain to be a boost to capital spending on infrastructure announced next week when the revised National Development Plan is published. Mr Chambers has been working through lists of projects with line Ministers in recent weeks and the plan is expected to mean significant additional spending on housing, water and power infrastructure. However, some of the more extravagant requests from Ministers have been denied. Could Mary Lou McDonald be about to enter the presidential race? Listen | 41:13 Coalition sources say that the spending increases on infrastructure will come at the cost of restraint in current expenditure, which will not expand at anything like the rate of recent years. The Government mood is said to have grown more pessimistic in recent months as threats to the economy and multinational sector grow. Officials have pointed to declining growth forecasts and sources involved in the process say that there is a settled view that the Republic's response must be to set a more cautious and restrained budgetary policy. However, there is also an awareness of the potential political cost of ending the cost-of-living payments while also holding down welfare increases and any tax adjustments. The Coalition has been under pressure from the Opposition in the Dáil recently on cost-of-living increases which politicians in all parties say is still a big issue for the public. Inflation has come down from close to 10 per cent in the aftermath of the pandemic and Russian invasion of Ukraine to less than 2 per cent. . Meanwhile, Mr Chambers will update the Cabinet on State spending for the first half of 2025 when it meets this morning. The end-of-June expenditure memo shows current expenditure is up 6.5 per cent compared to the first six months of 2024. Capital expenditure is up 22.5 per cent. Mr Chambers will confirm that capital investment will be stepped up in the revised National Development Plan next week.
Irish Independent
an hour ago
- Irish Independent
Revealed: How vast majority of public supports long-delayed new mandatory pension scheme
The new auto-enrolment pension, called My Future Fund, is due to begin from January after more than two decades of promises to launch such a scheme. Now a survey has found that over eight in 10 Irish adults believe it is fair to automatically sign workers up for the new pension scheme. The findings came in a survey of 1,000 adults nationwide by Ask Acorn, a national network of financial intermediaries. Under auto-enrolment, workers aged between 23 and 60 who earn more than €20,000 and are not already in an occupational pension scheme would automatically be enrolled in the new pension plan. These workers will have the option to opt out after six months. However, the research suggests they are unlikely to do so. Almost nine in 10 of those eligible for auto-enrolment say they are likely to remain in the pension scheme once enrolled. Financial experts said the findings showed a strong appetite for the scheme and signalled a positive shift towards broader pension coverage. But Ask Acorn experts warned that this could lead some workers to a false sense of financial security. Ask Acorn CEO Keith Butler said: 'People who may have previously been putting off pension planning could see their auto-enrolment as a 'job done' moment, when in fact the scheme might not be the most suitable or sufficient option for their individual retirement needs.' Last week, Social Protection Minister Dara Calleary launched a national awareness campaign for My Future Fund. Mr Butler said the Government should be encouraged by the feedback from the research. ADVERTISEMENT 'Even more important than the fact that so many support the fairness of the auto-enrolment itself is the fact that so many of those eligible plan to remain in the scheme,' he said. 'If nothing else, these results should be viewed by those with responsibility for the rollout as a compelling reason to ensure there are no further delays.' The rollout of the scheme has been subjected to repeated delays over the last two decades. Mr Butler said My Future Fund would be a good fit for many, especially those who have not yet thought seriously about pensions. 'But for others, particularly those with different income levels, career paths or retirement goals, auto-enrolment could fall short of delivering the retirement they're expecting. 'Workers should absolutely be proactive in taking some advice to determine whether auto-enrolment is truly the right vehicle for their needs, or whether the rollout is just the prompt they need to take action around their financial plans for the future.' The survey, conducted by iReach, found that four in 10 Irish adults believe it is 'very fair' that workers would be automatically enrolled to the pension scheme. A further four in 10 described it as 'somewhat fair'. One in six feel the compulsory enrolment of workers to the scheme is either 'somewhat' or 'very' unfair. The youngest age cohort surveyed are the most likely to feel it is 'very unfair' to automatically sign workers up to the scheme. Mr Butler said the findings indicated there was an obvious demand and need for the scheme. One-third of Irish workers have no pension coverage outside the state pension.
