The price of home heating oil has continued to climb following the outbreak of conflict in the Middle East. The average cost of 500 litres was put at just under €800 on Thursday, an increase of nearly 60 per cent in less than a week.
The dramatic price rise has been attributed to the conflict and a spike in wholesale prices, but domestic suppliers have been accused of “price gouging”, prompting the Government to ask the Competition and Consumer Protection Commission (CCPC) to launch an immediate investigation of the sector.
Accusations of profiteering, however, have been rejected by Fuels for Ireland, the umbrella group. Its chief executive, Kevin McPartlan, told The Irish Times the only excess profits being made as a result of price increases are by the Exchequer.
He said Government calls for an investigation into the fuel industry were merely “performative” and suggested the higher prices consumers were being asked to pay correlated exactly with what distributors were being charged for home-heating oil on wholesale markets.
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Speaking on Thursday, Minister for Enterprise Peter Burke said he wanted a “short investigation” by the CCPC.
“Hopefully [it can be completed] within the next month. I’m looking for a short investigation to look and see exactly the examples in relation to where prices have gone up very significantly that are not reflected in the international markets,” he said.
Burke is to meet McPartlan on Friday. He said he would be outlining the nature of the review and asking for the rationale for price increases. “When we look at what’s happening in international markets, it is telling a very different story and it’s my job to protect the consumer,” he said.
“I think we really need to look at what’s happening in the marketplace right now because what’s very clear to me over the last number of days [is that] what’s happening in the international markets, in terms of the price of crude oil, bears no reflection to what’s happening in the Irish market where we’ve seen [increases] upwards of 50 per cent by some consumers from their suppliers.”
McParlan said that contrary to what the Minister suggested, the price of crude oil had no bearing on the cost of home-heating oil, which, he said, was a refined product.
He said the wholesale market in the refined product had gone up by 60 per cent since the start of the conflict. “That is the reality of it. We are price takers in Ireland and the prices are set at a global commodity level. It is as black and white as that.”
Prices at a wholesale level, he explained, changed multiple times every day and were all publicly available: “There is no smoke and mirrors here.”
McPartlan said companies were receiving abuse from customers and in the wake of the Taoiseach talking about price gouging, he had even received death threats.
“When the leader of the country starts using that language, he is pouring fuel – if you pardon the pun – on to the flames," he said. “It really has an impact and it’s performative because the Taoiseach knows how commodity markets work, he is not an idiot.
“If he wants to talk about prices, let’s see who’s actually making the money here. I can absolutely guarantee that nobody in the oil industry is making more money this week than they were last week.”
McPartlan pointed out the biggest winner of the price increases was the Exchequer. He said that when the price of 1,000 litres of home-heating oil was around €1,000, the Government was taking €118 in VAT. The tax it collects from home heating oil, he added, had more than doubled in five days.
