Sir, – Claims have been made on these pages and elsewhere that the escalation of retail oil prices in this country cannot be due to the impact of the war in Ukraine, as the oil kept in storage in Ireland was imported at lower prices than we are seeing currently.
This is incorrect.
Firstly, wholesale prices were already increasing prior to the unjustified invasion of Ukraine.
Secondly, the oil kept in storage has to be replenished – and that replenishment has to happen at the wholesale rate on a given day.
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The unprecedented rise we are experiencing currently is largely due to international factors, and we are not immune from them.
About 10 per cent of the world’s oil comes from Russia, which means that the Russian invasion of Ukraine drove up demand from alternative markets and led to the increase of oil prices internationally. That price has now reached over $130 per barrel.
Even in the absence of official sanctions, many companies stopped Russian oil imports after the invasion and this further exacerbated supply issues.
Now that countries are imposing outright bans on the importation of Russian oil, it is likely that international prices will continue to increase.
While the National Oil Reserves Agency keeps a minimum of 90 days stock of oil to be deployed in the event of a supply shortage, this unfortunately does not render the Irish market immune to international price shocks.
What must be kept in mind is that, in order for stocks to be continuously replenished, oil has to be purchased wholesale at whatever the price is at that given moment: a “wait and see” approach isn’t good enough.
While the Government’s moves on cutting excise duty on fuels are to be welcomed, it needs to continue to take decisive action to keep pricing under control during this moment of international crisis. – Yours, etc,
KEVIN McPARTLAN,
Chief Executive,
Fuels for Ireland,
Dublin 2.
Sir, – Having ordered a half-tank of heating oil last Saturday, I rang my supplier to see where it was.
“Still underground” was the gist of the reply. – Yours, etc,
DAVID CURRAN,
Knocknacarra,
Galway.