Motorists in Ireland are bracing themselves for a costly winter as the government moves to reverse excise duty cuts that were implemented last year. Despite a decrease in global supply, the price of petrol and diesel will increase by 7c and 5c respectively from midnight. These reductions were initially introduced to alleviate the burden of rising costs for consumers. The cuts, which were implemented at the beginning of 2022, amounted to a reduction of 21c per litre for petrol and 16c per litre for diesel. This price increase is the second of three phases in the staggered restoration, with the final increase set to take place in October.
Following the September increase, petrol prices will rise again by 8c on October 31st, while diesel prices will increase by an additional 6c. Currently, the average price of petrol stands at around €1.73, with diesel averaging €1.68. However, Blake Boland of the AA warned that once prices are fully restored at the end of October, fuel costs are likely to exceed €1.90. This projection does not take into account the low inventory and soaring prices globally. Declining volumes from Russia and the Middle East are also expected to put further upward pressure on Irish fuel prices.
“We don’t know yet if it’s going to be a warm or cold winter, but after October, it is possible we could see fuel prices exceeding €2 once again,” said Mr Boland. “While prices have remained steady throughout the summer, there is a lot more uncertainty going into the next few months. Prices have been creeping up and as supply is reduced, this could continue into the winter.”
The increase in fuel prices is the latest blow to Irish consumers, who have already been hit by price hikes in food, energy, and insurance. Just this week, VHI announced an average increase of 7% in premium prices, following an initial hike just six months ago. Irish Life and Laya Healthcare have also announced significant increases that could result in many families paying hundreds more in annual insurance premiums.
Furthermore, the Central Statistics Office reported an unexpected increase in Irish headline inflation, with prices rising by 4.9% on an annual basis according to the Harmonised Index of Consumer Prices. This figure is up from 4.6% in the previous month and is primarily attributed to rising transport and energy costs. The rising cost of fuel is likely to further exacerbate consumer prices throughout the winter.