Cost of living: Fuel costs surge to record highs with some stations charging over €2 per litre

Fuel costs in Ireland have reached record highs as the effect of Russia's invasion of Ukraine hits international oil prices, with a Dublin filling station charging more than €2.12 per litre on Tuesday.

Oil briefly reached its highest level since 2008 on Monday, $139 a barrel, which has translated into petrol and diesel prices at some filling stations passing €2 a litre.

The Texaco garage on Dublin’s Crumlin Road, opposite the Iveagh Gardens estate, was charging 212.9 cent per litre of petrol and diesel on Tuesday. At a station in Skerries, Co Dublin petrol and diesel were both €2 per litre.

According to Pumps.ie, a website that allows the public to input the cost of fuel on individual forecourts, the price of petrol at filling stations on Dublin’s Merrion Road ranged from 199.9 cent to 204.9 cent on Tuesday.

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A petrol station in Douglas, Co Cork was charging 199 cent per litre on Monday, according to the website, while 193 cent per litre was reported in Ballincollig.

Every 10 cent increase at the pump adds €120 to the annual cost of filling your car, according to AA Ireland. For an average car, travelling 17,000km a year, motorists are paying approximately €800 more annually than they were in 2020.

The Government is expected to intervene on the issue, with Minister for the Environment Eamon Ryan saying on Tuesday that his officials were examining excise on fuel in consultation with Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath.

‘World has changed’

The Government had previously said the Budget would be the next time new measures to help households with the cost of living could be introduced, but Mr Ryan on Tuesday said the “world has changed” following the Russian invasion.

Such a move is known as a “swing mechanism” and consists of taxes on products being reduced when prices are really high, and then raised again when prices go back down.

Mr Ryan said the Government had to respond by providing housing and services for refugees and also reducing dependence on oil and dealing with the “inflationary impact of oil at $125-per-barrel”.

“It changes everything and we have to be responsive and quick.”

He said the European Commission was working on a suite of measures member states could take to respond to rising energy costs, and that it was important Irish actions were taken "in tandem" with this. However, the Green Party leader warned that the measures "won't cushion the full blow" of fuel increases.

“Everyone needs to realise that the scale of the increase in gas, oil and heating oil and coal prices is beyond precedent,” he said. “It’s impossible to fully protect against the full effect of that.”

Adjunct professor in economics at Trinity College Dublin John Fitzgerald, warned that any mechanisms to keep fuel prices down would see taxes rise.

“What the Government needs to do is what they did really well during Covid - is protect those who are on low incomes, those who would be really badly affected,” he told Newstalk. “They should concentrate their resources there, because they’re going to need very large resources to deal with the refugee issue.”

Energy prices

All energy providers have raised prices over the past year. The ESB noted that, based on Monday's prices, the wholesale gas costs it faces had increased 16-fold over in a year.

The cost of living has increased largely as a result of inflation, which the European Commission projects will be 4.6 per cent in Ireland this year, higher than the 3.5 per cent rate it forecasts for the eurozone as a whole.

The Government has already made some moves to help address the cost of living crisis, such as the €200 rebate off domestic electricity bills and the 20 per cent reduction in public transport fares until the end of the year.

It is understood that the Government is considering measures on such a scale that changes may be required to the Finance Bill, which is now working its way through the Oireachtas.

The Government on Monday announced that the €200 electricity credit will automatically be applied to Irish householders’ bills from April, and will continue over the following month or so depending on the billing cycle and supplier.

Rationed

Meanwhile, home heating oil and commercial motor diesel have started being rationed across Ireland as oil companies seek to manage supplies in the face of an unprecedented surge in demand.

Many home heating oil suppliers have capped the amounts they will sell to domestic users to 500 litres – less than half the capacity of a standard oil tank.

The limits started being imposed in the middle of last week in the face of a spike in demand with many homeowners seeking to counter rising prices by buying more oil than they are likely to need as they head in to the summer months.

The cost of home heating oil has climbed higher and faster than other fossil fuels in Ireland with prices almost doubling from about €400 for 500 litres to close to €800 in just a matter of months.

The impact of the price rises was illustrated by a recent Red C poll commissioned by the Society of St Vincent de Paul (SVP), which found the number of people struggling financially has doubled from 9 per cent to 18 per cent since the start of the pandemic. Some 37 per cent of people say they have cut back on essential heating and electricity use, the poll found.