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RTÉ News
28-06-2025
- Automotive
- RTÉ News
How are fluctuating oil prices affecting motorists at the pumps?
Motorists are feeling the pinch at the pumps this month, as both petrol and diesel prices are rising. While the month-on-month changes are relatively minor, they still add financial pressure especially for those commuting regularly and long-distance drivers. Several factors are driving these price hikes including rising global oil costs, domestic tax policies, and the seasonal surge in summer travel. Electric Vehicle (EV) charging prices, however, remain stable, continuing to offer a reliable alternative. Higher when the price of oil goes up it can directly increase the cost of producing electricity. And in Ireland, many power plants rely on oil and gas to generate electricity. According to AA Ireland's figures, fuel prices in Ireland have been steadily climbing in recent months, with petrol costing €1.80 per litre and diesel costing €1.77 per litre during the months of February, March and April. A fuel price drop in May saw petrol down to an average of €1.76 per litre, down 4 cents, while diesel fell to an average of €1.68 per litre, down 9 cents. But this month saw increases creeping up again with petrol now costing an average of €1.77 per litre, up 1 cent since May and diesel has risen to an average of €1.69 per litre, up 1 cent month-on-month. Wholesale oil prices have been fluctuating wildly in recent months, particularly in June when the Israel-Iran conflict broke out. Global benchmark Brent futures went from a high of $75.47 a barrel on April 2 to a four-year low of $58.40 on April 9. It saw another low on May 5 but since then Brent has been trending higher, reaching $70.40 a barrel on June 12, the day before Israel launched its bombing campaign against Iran. The Israeli attacks and the subsequent US bombings saw crude spike to a five-month high of $81.40 a barrel on June 23, before the risk premium evaporated with a ceasefire deal announced by US President Donald Trump. Oil prices rose on Friday (June 27) though they were set for their steepest weekly decline since March 2023, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate. The cost of petrol, diesel and home heating are increasing here as fuel retailers in Ireland are responding to international costs that are outside their control. Industry group Fuels for Ireland, the representative body for the liquid fuels sector, is warning that recent increases are putting renewed pressure on households and businesses. CEO of Fuels for Ireland, Kevin McPartlan warns how fuel is taxed is a matter for national policy. "When fuel prices go up, so does the State's tax take automatically, that may be fiscally efficient, but it can be economically and socially regressive," said Mr McPartlan. "This underlines the urgent need for a comprehensive review of how fuel for heating and transport is taxed." How is the price at the pump formed? The price of petrol and diesel is a combination of global and local factors. Crude oil is the main driver which is then influenced by costs such as refining and distribution, taxes, and retailer margins. In Ireland fuel taxes include excise duty, carbon tax and VAT, this means if you take AA Ireland's price for petrol in June of €1.77 per litre, then more than one euro is going to the government due to these levies. Brent crude prices are constantly shifting, when a refiner buys crude oil at a certain price on a certain day, they must refine it and transport it onwards. So as an input cost into the pump prices, there is a lag of about two weeks on crude prices when you see the trend where Brent goes up and down, and when the pump price is up and down. Exchange rate fluctuations can also affect the price in local currencies as refined fuels are often sold in US dollars. Crude price two weeks ago at the start of the Israel Iran conflict were going up, and that impact is still being felt now. But wholesale prices have flattened again as the ceasefire is seeing prices decline and are expected to stabilise. "What you would hope and expect now is pump prices have begun to fall already and over the next couple of days that fall will continue as people get new deliveries in," said Mr McPartlin. "They'll have bought at a lower wholesale price, and it seems to have levelled out, or there hasn't been any dramatic change in the last 24 hours (Friday 27)". What is Brent crude? Brent crude is a specific type of light, sweet crude oil which can be easily refined into petrol and diesel. The price of Brent crude is a major benchmark for the purchase of oil worldwide, so it can influence the price of other crude oils and refined products worldwide. It is the benchmark used for the light oil market in Europe, Africa, and the Middle East. Higher energy costs can make many goods more expensive across the world. Ireland imports 100% of its fuel needs and is therefore fully exposed to global markets. What are can motorists expect for the coming months? It is impossible to say. No one could have predicted the US bombing Iran, the ensuing ceasefire, the doubts over the ceasefire and the wild excesses it would cause on wholesale prices. But traders always factor risk into the market, whenever there is any uncertainty the wholesale prices go up straight away. Markets are reacting to risk, not just reality, with the speculative effect driving up prices, even in the absence of supply shortages. In Ireland even If all the storage tanks were completely full, they would hold around enough fuel for 10 days, but not all tanks are full at any one time. There is a reliance on ship deliveries and stocks are constantly running down. "It's never the case that people are sitting on high levels of stocks, we run on a just in time delivery basis throughout the supply chain," said Mr McPartlan. He is cautiously optimistic that the fear or concern the important shipping route The Strait of Hormuz would be closed is diminishing, and if that continues then wholesale markets will reflect that in prices. However, this expectation of some kind of stability for now is no indication of what could lie ahead. "To suggest what's going to happen weeks from now in a market which is really very dynamic would be foolish in the extreme," said Mr McPartlan. What could be done to ease costs for consumers? Fuels for Ireland said Irish motorists pay more tax on fuel than any other EU Member State, and Ireland has a higher dependency on oil than all but one of them. They are calling on the Minister for Finance Paschal Donohoe to establish a group of experts to review how fuel for heating and transport is taxed. "Price volatility is largely and overwhelmingly a result of global events over which we have very little influence," said Mr McPartlan "The one thing that we do have control over in this country is the taxation." Fuels for Ireland is proposing the group would include representatives from the fuel industry, environmental experts, economists, consumer groups including different demographics and people from rural areas. The aim, according to Mr McPartlan, is to achieve shared objectives of making sure the state gets a fair return on tax from fuels, that renewable and sustainable options are supported and that they don't make it unaffordable for people. "We think that all of those different interest groups, all the stakeholders could buy into that as a model for a conversation, we're hoping the Minister will do that and that he will make some changes in time for budget 2026." Mr McPartlan said the Minister has agreed to meet with them, and they are waiting to set a date.
Extra.ie
24-06-2025
- Business
- Extra.ie
No help for households if petrol prices keep soaring
Taoiseach Micheál Martin has downplayed the prospect of new cost-of-living measures in the Budget as fears grow over a spike in petrol prices and inflation as a result of the conflict in Iran. 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/ 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.
Irish Independent
24-06-2025
- Business
- Irish Independent
Move by Iran to close key trading route for oil could send petrol and diesel prices soaring here
Iran's parliament has endorsed a measure to close the Strait of Hormuz, a critical global transit chokepoint, in response to US airstrikes on Iranian nuclear sites, Iranian state media reported on Sunday. UCC energy expert Dr Paul Deane said even a temporary closure of the vital trade route would send pump prices up. 'Iran has the capability to close the Strait of Hormuz through military action,' he said. 'If this were to happen, even temporarily, it would have a major impact on global oil markets, causing prices to rise both in Ireland and around the world.' Brent crude oil prices rose in the wake of the US bombing of nuclear facilities in Iran, and was trading at around $77 (€67) yesterday, having hit €81 over the weekend. Motorists here have already seen the cost of diesel and petrol rise at the pumps over the past few weeks, after a few months of falling prices. Home-heating oil prices have shot up in recent days, with the cost of 1,000 litres of the fuel now approaching €1,000, according to comparison site Dr Deane said a key factor in where fuel prices would go was what would happen to the Strait of Hormuz and whether the United States would become further involved in the conflict, he wrote on the RTÉ website. The Strait of Hormuz, located in southern Iran, is a narrow corridor of water about 160km long. It serves as the main transit route from the Gulf for around 25pc of the world's oil supply, including exports from Saudi Arabia, the UAE, Kuwait, Qatar, Iraq and Iran. It is considered the world's most important oil gateway. Dr Deane said other important oil transit routes can be circumvented, but there was no meaningful alternative to the Strait of Hormuz for large-scale oil shipments. ADVERTISEMENT He said even a limited escalation in the conflict would 'cause a sharp spike in prices'. But it is unlikely to persist for a long period because the broader global oil landscape is relatively robust. Supply of crude oil is outstripping demand globally, with the move to electric vehicles a factor. Meanwhile, the fuel industry here has defended the surge in prices at the pumps in recent days even though prices were slow to fall earlier in the year when crude prices fell sharply. Kevin McPartlan, of Fuels for Ireland, which represents the major petrol retailers, denied his members were 'ripping off the public' by quickly increasing prices, and failing to drop them when crude had fallen earlier this year. He said profit margins were thin on the sale of petrol and diesel, and what he described as dynamic pricing meant wholesale prices were reflected quickly in what would be charged by retailers. Prices charged by forecourt operators tracked the wholesale price when the ship containing the refined petrol and diesel leaves port, with most fuel coming to Ireland from Wales.
Irish Independent
17-06-2025
- Business
- Irish Independent
Fears conflict in the Middle East will send petrol, diesel and home-heating oil prices soaring
Petrol and diesel prices have been rising for days, and there has also been a surge in the cost of home-heating oil. The price of 1,000 litres of heating oil has risen by €25 in the past few days, with energy experts expecting more hikes. Brent crude is up by 8pc since the first strikes on Iran last Friday, and was up by 13pc at one stage. This has raised fears of even higher increases in the price of petrol, diesel and heating oil. Late on Saturday, Iran said Israel struck a key fuel depot, while an oil refinery in the capital, Tehran, was also in flames. Wholesale costs for petrol were up 4c a litre in the past week, with diesel up 3c Iran has also partially suspended production at the world's biggest gasfield, the South Pars, after an Israeli strike caused a fire there. Adding to the uncertainty, Iran said it was considering closing the Strait of Hormuz amid the intensifying conflict with Israel. Such a move would send oil prices soaring. Petrol and diesel prices are already up in the past few days, according to Kevin McPartlan of Fuels for Ireland, which represents the major petrol retailers. He said wholesale costs for petrol were up 4c a litre in the past week, with diesel up by 3c. Industry sources expect prices at the pumps to keep rising because of the conflict in the Middle East. ADVERTISEMENT Mr McPartlan said: 'The various different factors that impact on petrol and diesel prices are all going in the wrong direction.' He denied his members were 'ripping off the public' by quickly increasing prices and failing to drop them when crude had fallen earlier this year. He said profit margins were thin on the sale of petrol and diesel, and what he described as dynamic pricing meant wholesale prices were reflected quickly in what would be charged by petrol retailers. Prices charged by forecourt operators reflect the wholesale price when the ship containing the refined petrol and diesel leaves port, with most fuel coming to Ireland from Wales. 1,000 litres of heating oil is €900, nearly 10pc less than this time last year Mr McPartlan said some petrol retailers would take deliveries several times a day. Michael Toner, of home-heating oil price comparison site said his site had recorded strong rises in prices. 'We're seeing a big jump in heating oil prices in just a couple of days of over €25 for 1,000 litres and we're expecting that to increase further,' he said. 'This is undoubtedly as a result of conflict in the Middle East between Israel and Iran.' The price of 1,000 litres is now averaging €900, 'which is still nearly 10pc less than it was this time last year, but we are fully expecting that gap to narrow', Mr Toner said. Energy expert Dr Paul Deane, of University College Cork, said there had been a jump in EU wholesale gas prices in the past few days, but it had been modest in relation to past price increases. However, of concern is the potential closure threat to the Strait of Hormuz, a shipping route for nearly 20pc of global liquid natural gas (LNG) trade. If this were to happen, it would increase prices, but the magnitude would really depend on the duration, Dr Deane said.
Extra.ie
15-05-2025
- Business
- Extra.ie
Border petrol stations going bust over price gulf with the North
Filling stations along the border are going bust thanks to petrol being 25% cheaper in the North – with more closures to come, the industry has warned Stakeholders say higher duty and carbon taxes on southern garages have made a tank around €15 cheaper in the North – enough to spark 'fuel tourism' of crossing the border for cheaper prices. The average petrol price in the North is currently 128.7p per litre, while the average price of diesel is 133.4p per litre, the lowest since 2021. The average fuel price in the Republic is 180c a litre for petrol and 177c for diesel. At current exchange rates, that makes Northern garages cheaper by around 27c a litre for petrol and 30c for diesel. Pic: Getty Images At the average fuel tank capacity of 55 litres, a fill-up from empty on the Northern side of the border would save almost €15 on petrol and €16.50 on diesel. The Republic's Department of Transport said it was important to note a number of factors affect the final retail price of fuels, including energy market dynamics, wholesale pricing, individual retail pricing policy, transport costs, exchange rate fluctuations and taxation. A spokesman for Fuels for Ireland, which represents the major petrol retailers in the country, said: 'The overwhelming reason for this [the price gap] is the difference in tax. The price of petrol and diesel goes up from midnight. Pic: Ray Tang/Anadolu Agency via Getty Images There is also the fact that we have a far higher renewable obligation on transport fuel than they do [in the North]; we use more biofuel, and that's a little bit more expensive.' Over the term of the last government, from February 2020 until November 2024, new taxes added about 15c to a litre of fuel, putting Ireland in the top three most expensive countries for fuel taxes and the highest pump prices in the EU. The Fuels for Ireland spokesman added: 'Yes, the Government needs to get an income from fuel, it's been relying on it for decades, it's not going to change. Pic: Getty Images We also need to support the transition to renewable fuels, which is an existential need, but then we also have to make sure that Irish householders and businesses can continue to live and operate.' David Blevings, spokesman for the Irish Petrol Retailers' Association (IPRA), which represents independent garages, said: 'The IPRA is very concerned for petrol stations located in the border counties. They are closing. 'The price differential between motor fuel in the North and South is almost 25%. The stations in border areas cannot compete. This is causing hundreds of job losses in areas that have no replacement jobs to offer.' Pic: Getty Images Mr Blevings said that 'we have asked our members to lobby their local TD to ask the Finance Minister [Paschal Donohoe] how many fuel stations in border locations have closed and what plans he has to rectify this duty differential so that no more businesses have to close'. 'There are some closures already and there'll be more to come,' he added. The organisation has already had talks with the Government about the level of duty and carbon taxes. Minister Donohoe is due to meet with industry representatives in the next few weeks to discuss the tax situation and the effect it is having at the border. The price disparity was the reason for the Texaco filling station in Muff, Co. Donegal – which straddles the border – closing recently after 25 years, with the loss of 50 jobs. Owner Colm McKenna told RTÉ: 'We were in business here in Muff since 1999 and when the excise duty costs were better for us in the south, it was viable, but the large difference [in] excise duty and the carbon taxes now meant we had to close, because we lost €100,000 last year. We had no choice.'
