Steep increases in the price of coal from Monday will mean the cost of a bag soaring to about 50 per cent above rates seen just six months ago, and more increases may be on the way soon to keep up with demand, one of Ireland’s top suppliers of fuel has said.
Dundalk-based CPL Fuels, which is also one of Europe's leading suppliers of solid fuels, said the increases will apply to all coal purchased by retailers and merchants.
The move comes “as a direct response to increased international commodity prices and more recently due to the war in Ukraine”.
CPL Fuels said the price of a bag of coal for merchants will increase by €4.50 per bag from Monday. Retailers could then be expected to pass the rise on to consumers.
A second increase is scheduled for April 4th and will mean a further rise of €2.50 per bag. This combined increase of €7 is on top of the €3 per bag increase that has come in since September last.
As a result, the price of a bag of coal will have risen by approximately 50 per cent since September, and this excludes the expected further increase being imposed by the Government through the carbon tax in May. This will add about another 90 cent to a bag, for which a consumer is paying roughly €23.
By May, the combined VAT and carbon tax paid to the State will be more than €8 per bag.
CPL Fuels managing director Niall McGuinness told The Irish Times on Friday that Russia’s invasion of Ukraine had exacerbated an already volatile situation in the market.
“The impact of the war is having a very significant influence on this, pushing unpredictability and intense pressure within global markets,” he said. “This presents a major challenge for all fuel suppliers such as CPL.
“It is clear from the response of the EU and the Irish Government that the current situation we are in is unprecedented. We have no indication of how long this uncertainty will last and what further impact it will have on energy and fuel supplies.
“Consequently, we are seeing a significant escalation in raw materials, energy, and transportation costs, with commodity prices now at an all-time high.”
Upward price curve
Mr McGuinness said that even with the increase in prices, CPL will not be in a position to replenish wholesale supplies, and may have to raise prices further despite the State being in the throes of a major crisis in terms of the cost of living and energy.
“Whilst conscious of the magnitude of these increases it is additionally important to stress that due to the global spike in the price of raw materials, these cost increases as announced will not be sufficient for CPL or others to replenish their wholesale supplies into the relative medium term,” he said.
“This is the extent of the challenge that we all face in the sector and as a result further increases may be required in the relatively short term, if we are to be a position to continue to supply product to meet market demand.”
He added that CPL would “continue to do all that we can” to mitigate the costs, “but, unfortunately, we cannot absorb the immediate significant increases we are facing”. He called on the Government to act.
"I believe strongly that Government action is required to address the spiralling cost and impact on families, as according to the Central Statistics Office approximately 80,000 homes in Ireland use coal as their primary home heating source," he said.
“This very significant number of families and individuals are left with no alternative to heat their homes.”