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fuel costs

Petrol prices rise over €2 per litre mark following EU announcement of Russian oil ban

Head of communications at AA Ireland Paddy Comyn told The Journal that prices are at a record high.

PETROL PRICES HAVE risen over the €2-a-litre mark in filling stations across the country, a day after the Taoiseach warned that Europe is entering a “different era” of fossil fuel pricing due to Russia’s invasion of Ukraine.

It comes after Irish inflation hit 8.2% last month and the EU announced that it will ban two-thirds of Russian oil imports to the European Union by the end of the year. 

The global oil price rose to $120 (€112.04) a barrel for the first time since early March after the agreement.

Speaking about the ban in Brussels yesterday, Micheál Martin said: “It is a watershed moment in terms of fossil fuels in general, which will make for fairly rocky territory over the next number of years in terms of pricing around fossil fuels, we cannot get away from that.”

Martin said the government will do everything it can to “alleviate the pressures” on Irish consumers.

In March, the Government introduced an excise cut of 20c per litre on petrol and 15c on diesel, but within days, it was wiped out.

According to the AA, the national average price of petrol last month stood at 191.9c per litre. The national average for a litre of diesel was listed as 194.6c.

At time of publication, petrol prices were up to 208.9c per litre at some forecourts in Dublin, while in Cork, it has hit 215.9c per litre. 

At one filling station in Waterford, the price of a litre of petrol stands at 202.9c, while in Kildare, the price has hit 201.9c per litre, with 202.9c per litre being charged in Tipperary.

Forecourts across several other counties, including Clare, Galway, Limerick and Sligo, are charging just below 199.9c per litre.

Diesel prices, which breached the €2-a-litre mark last month, stand at 203.9c per litre in Dublin, and 199.9c in Cork and Waterford. 

Head of communications at AA Ireland Paddy Comyn told The Journal that prices are at a record high. 

“The reductions that the Government applied in terms of duty have been wiped out by the increases, and it doesn’t look like we’re going to see any major reduction in these anytime soon,” he said.

“Most motorists are now paying between €500-€600 more per year for fuel than they were a year ago.”

He said the rise in fuel prices is mostly affecting people in rural areas. 

They don’t have a viable alternative to the car, be it public transport or otherwise. Obviously for people living in Dublin, they have the Dart, the Luas and cycling lanes, but for people in rural areas without proper public transport networks, these high prices are causing the most impact.

Comyn said that there’s a potential for prices to continue to increase, but said the Government need to ensure we have enough supply.

“The main priority is to make sure that we have enough, regardless of price or otherwise, to ensure that supply remain adequate. But I think the natural byproduct of a reduced supply will be potentially increases in terms of pricing, so that, I think, is the sad inevitability for now,” he said. 

He added that prices will “certainly” not be reducing any time soon.

Cost of living crisis

Comyn said that while further excise cuts might help, “we would see it as a short term measure. We would acknowledge that it’s not a viable long term measure. There can’t just be constant cuts.”

ESRI energy economist Muireann Lynch told The Journal that it’s hard to see prices coming down significantly as long as the EU sanctions continue.

“Even if there is an end to the war, it looks like there is going to be a long-run transition away from Russian fossil fuels,” she said.

“Whether or not that means higher prices until we can transition off fossil fuels altogether remains to be seen, as that depends on whether we can source other supplies of fossil fuels.”

Lynch said that in trying to alleviate the rising prices, the Government “can’t shield everyone” from the effects of the Ukraine war.

Someone is going to have to feel the pain. In this context, it makes sense to target measures towards those who can least afford these higher energy prices, and indeed prices in general.

She said another excise duty cut is not well targeted because “it hits all households, and is skewed towards higher energy users, which tend to be richer households”.

“Using the taxation and social welfare system to target increased expenditure towards households that need it most would be the best way of protecting those on low and fixed incomes, but that’s not possible until the budget rolls around,” she added.

The rise in petrol prices further adds to the cost of living crisis, with inflation in the eurozone now at its highest level since recordkeeping for the euro began in 1997.

Soaring prices are weighing on household finances and making it more urgent for officials to act quickly to head off further price increases for food and energy.

‘Out of touch’

Last night, Sinn Féin tabled a motion to provide a payment to workers earning less than €60,000.

The bill, tabled by Claire Kerrane TD, would provide €200 for every adult with an income less than €30,000 and €100 for every adult with an income between €30,000 and €60,000.

Speaking during Leaders’ Questions this afternoon, Sinn Féin’s Pearse Doherty told the Taoiseach that the Government is “so far out of touch, you couldn’t make it up.”

He urged him to “do more” and bring forward a “mini budget” before October to assist people with the cost of living crisis. 

Martin said the Government has taken a lot of measures to ease the burden of the crisis, such as cutting transport fares by 20%, lowering the threshold for the Drugs Payment Scheme to €80 per month and bringing forward the Working Family Payment budget increase.

“The cutting of tax and the increases in social protection have mattered, and we want to now explore with the social partners how we deal with this in a comprehensive, strategic way,” he said. 

“You cannot chase inflation away month after month, by a billion or two billion a month. That is not a sustainable pathway.”

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