‘Something needs to be done’

Local fuel suppliers are pleading with government representatives to “act now” to ease rapidly rising fuel costs as some predict the cost of diesel could hit 225 cent per litre before the end of the week.

Filling station owners forecast daily increases at the pumps as demand outstrips supply; while some say fuel rations could yet be imposed. As Russia continues to wage war on the Ukraine and oil prices rocket, some outlets were forced to turn customers away after supplies ran low and they awaited their next delivery. Jones Oil in Cavan Town, frequently the most competitive for diesel prices in the county town, had to close the gates a number of times over the weekend and in recent days.

In just a week, the cost of refuelling a car has risen by a staggering 41 cent per litre, inclusive of VAT, with that figure predicted to rise even further in the coming days as the price of diesel is expected to cost more than petrol.

“It’s every night this week, that’s what they’re talking. By Thursday or Friday, it could be up another 7 or 8 cent again,” predicts local retailer Padraig Rudden of pump prices.

The owner of Rudden’s Costcutter and Top Oil Service Station in Cavan Town believes the cost will only go upwards given current global uncertainties, and is urging the Government to “step in” to relieve pressure on already hard-pushed families across the region.

As a fuel retailer, Padraig gets daily updates telling him what the values will be the day after. He buys in fuel on a Wednesday, and based on this week’s predicted prices, the price on the pumps tomorrow (Thursday) will be 215.9c a litre for diesel, with petrol running at a lower rate of 212.9.He’s as astonished as anyone at the rapid rise in fuel costs.

“We take in 40,000 litres at a time, and if it goes up 9c, it’s an increase of almost €4,200 on every load. By the end of the week you could be talking 2.25c per litre, that’s my reckoning. The Government has to step in, and will have to step in shortly.

I’ve been onto Heather Humphreys, I’ve met with her and Leo Varadkar, [fellow retailer] Philip Kiernan has met with them. We’re sending them texts every day ‘see the price today’, and yet they’re talking about doing something down the line. It’s now that something needs to be done!”

Some countries have already acted. The Finnish government announced plans last week to offset high energy prices cause by Russia’s invasion of Ukraine with subsidies and tax cuts, while the European Commission is weighing up what guidance to give member States.

He says out of the 41 cent per litre rise over the past week, the Irish Exchequer benefited to the tune of an additional 24.5c between VAT and Duty.

“The Government is the biggest winner here. They’re getting near enough 60% of any increase, plus 23% VAT on top of that. So everyday [the price] goes up is a great day for Revenue. Do you know how much I make on that? Even at that price? 5.5c pl!”

He recalls being asked by a customer when changing the prices on Saturday last if was “enjoying” himself. “Whether it’s €2, €2.50, or even €1, the retailer is still only making 5.5c. We don’t work on percentage, we work on cents. We haven’t got a bob extra,” insists Padraig. “In fact it’s harder now than it ever was because you’re nearly embarrassed to put it up.”

He contends that, if the State were to announce a 30 to 35c cut in fuel price, Revenue would still be making “as much as they were making the same money they were back on January 1. Without costing them anything more.”

Padraig now estimates that a person spending €20 on fuel this week is getting 25% less than they were in terms of a fill than just three months ago.

‘No shortage’

Despite some initial “panic buying” last week when some retailers ran out of fuel, Padraig doesn’t foresee any critical shortages coming down the line, as the scenario at present is “far too lucrative” for producers to allow that happen.

“They’re holding up on the sea and in the oil wells as well just to drive the price up further. But there’ll be no shortage. They’re making too much money. The producers are making an absolute fortune right now.”

What Padraig does predict however is the cost of fuel will begin impacting the price of other goods on the shop shelves.

“Everything you eat or buy in Ireland is delivered by either diesel or petrol. Now it’s costing the fella probably 45% more than it was three months ago to deliver. He can’t afford to deliver at that same price.”

Padraig expects the current state of influx to last at least another four to five months until supply lines “settle down” or some form of “settlement” is reached in Eastern Europe.

“How long is that going to take? They’re talking about blocking Russian oil coming in altogether. That’s what put [prices] mental this week altogether. Yer man Biden making that announcement has done that. It’s every day right now. Everyday makes such a big difference in this game.”

'I'd tell Putin to call off the war'

With only the east of Cavan connected to the Irish natural gas pipeline, the majority of the county relies on home heating oil to stave off the wintery chills. The rate of increase of the price of oil has resulted in a spike in demand as consumers worry about availability.

The rise in oil prices on Monday morning took Brent crude over $130 (€119.35) a barrel, up around 40% from a week ago: “We are pig in the middle, we are getting some abuse. People don't understand, we just can't get it. We are like the pub with no beer. If you don't have it, you can't sell it,” Peter Skelly Sr of Skelly's Oil told the Celt on Tuesday morning.

The demand for home heating fuel comes as the cost for buyers has skyrocketed: “It has practically doubled since October, it's crazy stuff,” Peter says. Soaring demand and dwindling supplies mean the prospect of rationing is very real: “I would say it is more probable than possible,” Peter told the Celt.

“There is a huge reduction in the volume of fuel coming in. Every oil company's allocation is based on what they bought last year. That allocation is reduced because of the situation we find ourselves in.”

There are supplies available to the fuel retailer, but restrictions are in place: “Our allocation is quite big because home heating oil is very popular in this part of Cavan. We got a load last Saturday and we have been told it'll be next Monday before our next load. There's not a whole lot of panic buying, but there is a bit.”

The fear is that contracting supply will increase demand: “Customers are concerned when they ring up the office and they hear we have no oil. We have trucks out today, but we're almost empty. We have a small little drop left for tomorrow, but that's to supply customers who called last Thursday and Friday.

“Some people have told us that we are the fourth or fifth company they have called. They were told the same story that there are limited supplies,” Peter explains.

The fuel supplier has no easy solution to what can be done to arrest the escalation in prices: “I wish I knew, I'd tell Putin to call off the war.”