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LAST UPDATE | 3 Mar
ENTERPRISE MINISTER PETER Burke has written to the Chair of the Competition and Consumer Protection Commission (CCPC) requesting it to carry out a review of the retail energy market.
The request comes as opposition parties called for government to consider introducing targeted energy supports for Irish households in response to rising fuel prices.
The current crisis in the Arabian Gulf, a key provider for energy supplies worldwide, may contribute to upward pressures on energy prices.
The minister said today that it is important that any such upward pressure does not lead to price increases for the consumer which are not proportionate.
This morning, Taoiseach Micheál Martin warned filling stations and home heating oil suppliers against price gouging as crude oil prices rise in response to war in the Middle East.
Speaking to reporters before Cabinet, the Taoiseach said government is “very concerned” at the increase in energy prices since the US and Israel began war with Iran.
The Strait of Hormuz, through which around 20% of the world’s oil supply passes, has been shut by Iran. Yesterday, crude oil prices were about 10% higher than before the conflict began, and remain at a similar level today.
However, wholesale prices of petrol, diesel, kerosene have not gone up by the same amount. The wholesale price is influenced by the wider global economy, as well as shipping and supply.
Martin said: “There’s no excuse for prices going up on the pumps yesterday, or anywhere, because our oil is coming from the North Sea, and we don’t want any price gouging going on.
He said there will be increases in fuel prices over time “if the situation doesn’t stabilise in the short term”.
“But given the fact that people have an adequacy of supplies right now, and given that a lot of our oil is coming from North Sea, which comes from Norway, there shouldn’t be these kind of increases that people have been commenting on yesterday.”
He confirmed the CCPC has been called upon to “examine the industry and the sector in terms of any unfair pricing practices that is underway”.
“Ireland already experiences high energy prices; we are currently 5th highest in the EU according to the most recent Eurostat data. There are a number of historic reasons for this, including our dispersed population, low level of interconnection with European markets and our dependence on imported energy,” Burke said this evening.
“It’s imperative that we ensure the market is competitive and fair for consumers , so that’s why I am asking to CCPC to carry out this review to ensure we are using all the levers at our disposal,” he added.
Aontú leader Peadar Tóibín raised the cost of filling a car with the Taoiseach this afternoon in the Dáil, stating that filling a tank of petrol at the moment is €100.
“Some 60% of the cost of a litre of diesel is now tax, and 65% of the cost of a litre of petrol is now tax. This breaks down as follows: 54 cent in excise; 2 cent on the National Oil Reserve Agency, NORA; 16 cent on carbon tax; 8 cent on better energy tax; and 32 cent on VAT,” he said.
He added:
Out of the €1.73 price for a litre of petrol, €1.13 is now government tax.
“The government is taking the majority of the cost of a litre of petrol and diesel in tax. A €100 fill of a tank would actually cost €35 if it was not for the ever-increasing fuel taxes by this government,” said Tóibín.
The Irish Road Haulage Association (IRHA) has this evening warned diesel prices are likely to reach and surpass €2 per litre, and urged the government to introduce temporary supports for operators.
The group said escalating tensions in the Middle East will almost certainly push pump prices beyond the €2 mark, increasing costs across groceries, construction materials and transport, with particular pressure on rural and small businesses.
The previous finance minister Paschal Donohoe moved to decrease excise costs on fuel in previous years when the war in Ukraine forced the price per litre to edge towards the €2 mark.
However, a government spokesperson said this afternoon that there are no plans to reduce excise.
Yesterday, both Finance Minister Simon Harris and CEO of Fuels for Ireland Kevin McPartlan warned that the situation remains dynamic and could change at any moment.
Harris said he had instructed his department to carry out an economic analysis of the situation, and they would “update our forecasting and our projections for the Irish economy by the end of the month”.
Green Party leader Roderic O’Gorman told reporters that energy supports must be considered by government, stating that a one-off boost to the fuel allowance or targeted energy credits are options to consider.
He said when energy credits were first introduced, they were introduced “in a hurry” as it was the simplest way of getting money to households.
“Now, at this stage, I imagine that the departments in question have been able to gather some degree of data in terms of, if you wanted to use these in a more targeted manner, how would you do so?
“So I think it could be looking at either option, but I think it has to be on the table now, at least particularly if this war lasts for a significant amount of time, and the energy spikes that we’ve seen in the last three or four days are maintained.”
Labour TD George Lawlor said politicians have been fielding calls from people who have seen their home heating oil costs increase in recent days.
One pensioner he spoke to said they paid €75 more yesterday for 300 litres of oil than they would have paid on Friday.
“This is despite the fact that the war was about 48 hours old, and yet the oil companies were gouging people already,” he said.
He called on the government to intervene, stating it has the power to do so under the Consumer Protection Act 2007.
Jennifer Whitmore of the Social Democrats expressed similar sentiments and said companies and retailers are “apparently price gouging when it comes to heating oil on the back of this war”.
“We heard reports of home heating oil going up by 10 to 20% pretty much overnight. Now I want to be very clear the home heating oil that people are using, and where we saw the spikes, that home heating oil was in the stocks of those retailers. There was no rationale or reason to increase those prices to that extent,” she said.
With reporting by Christina Finn
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