Fuel Prices in Ireland

kippy · 16-01-2011 04:53PM #1

There was a report today in the Indo about fuel prices and the fact they would probably hit €1.60 for a liter of petrol in the next couple of months and that this was going to be a major stumbling block for an Irish "recovery".
http://www.independent.ie/business/dearer-oil-will-hit-irish-firms-hard-2497989.html
(That isnt the article I read but it was close enough)
Anyhow,
Obviously the cost to the end user of fuel and indeed the cost of fuel to business (electricity, shipping costs, heat costs etc) have a use effect on the price of goods and services and indeed the cost of living.

The insinuation in most newspaper reports is that there is very little we can do to "escape" these rises but it is very plain to see that there is a lot, as a country we can do.

How much of a litre of petrol/diesel is tax, how much is excise and are these percentages? If so obviously when the cost of these fuels rise more goes to the exchequer.

How ground breaking would it be to reduce the taxation (at all levels) on these fuels? Wouldnt such a thing be, in general, good for the country?
Obviously reducing our need for these fuels is something we should be doing more however to me it appears the "state" finances have an interest in these fuels remaining expensive so one has to ask how much work is being done in this field.

Okay, rambling post.
Essentially, would it be worth reducing the taxation on fuels in order to reduce the cost of them to business and consumer and counteract the price rises elsewhere in order to stimulate the economy?

ei.sdraob · 16-01-2011 04:57PM

Yes it would be a stimulus

businesses need fuels to get goods to their shops
consumers need fuel to get to these shops and services

its a no-brainer

anyways considering that almost 1 euro on each litre of petrol here is one form of tax or another (including taxes on taxes) we are being ripped off by the state, and the state has plenty of room to create a real "stimulus" by reducing prices

cue greens in 3,2,1 telling us in their form of doublespeak as to how high fuel prices are "good" for us...

Aard · 16-01-2011 05:16PM

In relation to the taxes on fuel:
- First you add a fixed excise to the basic fuel price. For petrol, this is €0.57622 per litre.
- You then add VAT @ 21% of the basic + excise amount to give the total price per litre.

So, in essence (pun intended), all basic taxes on petrol per litre amount to €0.6972262. The excise amount stays the same no matter how much the pre-tax price is, whereas the VAT naturally increases as the pre-tax price does.

What would be preferable, then, would be to decrease VAT. I've shown in another thread that it is entirely possible to reduce VAT to 17% if the reduced-rate is abolished, or to reduce it to 15% if the zero-rate is also abolised. Both cases would retain the exemptions of healthcare, education, and transport. (This is pretty much how it is in Denmark, except that their single-rate is 25%.) This would decrease tax on a price of €1.41 by nearly 7c.

jimmynokia · 16-01-2011 05:18PM

the price of petrol and deisel in this country is a fcukin joke.

P. Breathnach · 16-01-2011 05:48PM

kippy wrote: »

What is you opinion on the topic P. Breathnach?

We are not currently in a position to cut any taxes by a significant amount.

In addition, I believe that measures designed to minimise fuel consumption are environmentally good.

kippy · 16-01-2011 05:51PM

P. Breathnach wrote: »

We are not currently in a position to cut any taxes by a significant amount.

In addition, I believe that measures designed to minimise fuel consumption are environmentally good.

Do you not think that cutting certain taxes can lead to a net positive effect on the economy?

One reason I posed the question was to ask whether cutting certain taxes during a recession had been used as a means of stimulus in other economies and if not, why not........

paul71 · 16-01-2011 05:56PM

P. Breathnach wrote: »

We are not currently in a position to cut any taxes by a significant amount.

In addition, I believe that measures designed to minimise fuel consumption are environmentally good.

I agree, unless we get realistic and decide that we must introduce real government spending reform. Taxes need to be reduced to help businesses but cannot because we are pumping into a non functioning Health Service, paying hundreds of people to process Motor tax when 10 good unemployed system analysists could do the same job.

Simple choice is drop taxes and encourage real employment or continue to pay an unsustainable amount for an underpreforming PS.

kippy · 16-01-2011 06:04PM

paul71 wrote: »

I agree, unless we get realistic and decide that we must introduce real government spending reform. Taxes need to be reduced to help businesses but cannot because we are pumping into a non functioning Health Service, paying hundreds of people to process Motor tax when 10 good unemployed system analysists could do the same job.

Simple choice is drop taxes and encourage real employment or continue to pay an unsustainable amount for an underpreforming PS.

Look,
I amnt talking about the greater issues of an underperforming PS. I am talking about the greater issues of peoples spending power and a private sector that are finding it exceptionally difficult to create jobs and as such, wealth.
The underperforming/overpaid public sector or whatever you point of view is on it, is not the reason for this topic.

You see governments the world over literally printing money or pumping money into their economies to get them back on track. Reducing the taxation on a key driver of cost for business surely has to have a positive effect on an economy, even if just for an initial year or two to provide a kick start.

paul71 · 16-01-2011 06:10PM

kippy wrote: »

Look,
I amnt talking about the greater issues of an underperforming PS. I am talking about the greater issues of peoples spending power and a private sector that are finding it exceptionally difficult to create jobs and as such, wealth.
The underperforming/overpaid public sector or whatever you point of view is on it, is not the reason for this topic.

You see governments the world over literally printing money or pumping money into their economies to get them back on track. Reducing the taxation on a key driver of cost for business surely has to have a positive effect on an economy, even if just for an initial year or two to provide a kick start.

We can't print money like US or UK because we are a member of the Euro, to say we must reduce taxes is too simplistic because money is going out fasting then it is going in. We can't pump money we don't have into the economy.

Which means it is a simple choice between tax or spending, to ignore this is just sticking your head in the sand.

kippy · 16-01-2011 06:21PM

paul71 wrote: »

We can't print money like US or UK because we are a member of the Euro, to say we must reduce taxes is too simplistic because money is going out fasting then it is going in. We can't pump money we don't have into the economy.

Which means it is a simple choice between tax or spending, to ignore this is just sticking your head in the sand.

I am aware of the reasons why we cannot print money
Taxation and controlling spending are the only tools available to us.

1. Reducing the tax on something as critical as fuel wouldnt be pumping money we dont have into the economy.
2. The result I would be looking for is an economy whereby business found it easier to trade and the consumer notices a reduction in cost, thus driving other parts of the economy.

ie. the money "lost" on the taxation reduction of fuel, would be gained many times over through job creation in sectors whose costs are not so high or in the spending people make on cheaper goods.

To suggest that cutting certain taxes in an economy in times of recession is akin to burying ones head in the sand is to have a very narrow outlook on how economies work.

paul71 · 16-01-2011 06:35PM

kippy wrote: »

I am aware of the reasons why we cannot print money
Taxation and controlling spending are the only tools available to us.

1. Reducing the tax on something as critical as fuel wouldnt be pumping money we dont have into the economy.
2. The result I would be looking for is an economy whereby business found it easier to trade and the consumer notices a reduction in cost, thus driving other parts of the economy.

ie. the money "lost" on the taxation reduction of fuel, would be gained many times over through job creation in sectors whose costs are not so high or in the spending people make on cheaper goods.

To suggest that cutting certain taxes in an economy in times of recession is akin to burying ones head in the sand is to have a very narrow outlook on how economies work.

Fundementally I agree, but you are still ignoring how bad our public finances are. The IMF loans are contingent on controls on spending, we cannot borrow money on the bond markets because we are priced out due to our idiotic overspending.

The country is pretty close to being insolvant and spending must be cut before Tax is addressed. The truth about what happened in Nov/Dec is only starting to come out but I think we were only weeks away from PS paycheques bouncing.

Of course, I agree fuel taxes and more importantly commercial rates need to be cut, but the reality needs to be faced that we must also close hospitals, cut all types of welfare by 20%, close a university, and reduce vastily pay scales in PS. That is how drastic our stituation is.

ei.sdraob · 16-01-2011 06:47PM

He meant we need to continue paying 2.5x what it actually costs so buddies in PS can get nice pensions and we give most of these taxes to Imf instead of you know fixing the deathtraps of roads we have.

Permabear · 16-01-2011 08:00PM

This post has been deleted.

thebman · 16-01-2011 08:17PM

The petrol stations could take the hit given they have been sneaking up the price left, right and centre anyway,

If the government reduce the tax, I do not believe these business will pass on the savings as it is something many people have no choice but to purchase, just to get to work.

When you see petrol prices down the countries being substantially cheaper than anywhere near Dublin, you know they have room for maneuver but they think the public will take sitting down.

So people need to start shopping around a lot better to show them and where necessary limit driving to try to reduce their usage to teach the petrol stations that the public are at the limit of what we can pay for fuel.

Petrol station owners seem to only know how to put the price up though. Petrol does seem to be significantly cheaper in Cork/Kerry than it is in Dublin from last time I was down there.

Permabear · 16-01-2011 08:20PM

This post has been deleted.

ei.sdraob · 16-01-2011 08:24PM

thebman wrote: »

The petrol stations could take the hit given they have been sneaking up the price left, right and centre anyway,

If the government reduce the tax, I do not believe these business will pass on the savings as it is something many people have no choice but to purchase, just to get to work.

When you see petrol prices down the countries being substantially cheaper than anywhere near Dublin, you know they have room for maneuver but they think the public will take sitting down.

So people need to start shopping around a lot better to show them and where necessary limit driving to try to reduce their usage to teach the petrol stations that the public are at the limit of what we can pay for fuel.

Petrol station owners seem to only know how to put the price up though. Petrol does seem to be significantly cheaper in Cork/Kerry than it is in Dublin from last time I was down there.

There is definitely an "agreement" here in Galway between most petrol stations, they where caught before price-fixing i suppose they just got slap on wrist since they are still at it. The jump before the budget was astonishing and then another jump after it. Tho I have to say the petrol station at Carnmore Cross is great, usually cheapest and the chaps running it are nice

@Permabear
I wouldnt mind if the money went into infrastructure, but its not, it just got into the same government pot that gets wasted, the roads today after the ice and rains are atrocious, there are potholes within potholes where you can fit an elephant in, for example on the r339 today

petrol today is about 56-60c per liter average across pond, and yes that includes taxes and petrol station profits, taxes which (shock horror) actually go on maintaining roads, and by god the road network is good, i never seen a pothole in my travels there

Permabear · 16-01-2011 08:32PM

This post has been deleted.

Scarab80 · 16-01-2011 08:35PM

thebman wrote: »

The petrol stations could take the hit given they have been sneaking up the price left, right and centre anyway,

If the government reduce the tax, I do not believe these business will pass on the savings as it is something many people have no choice but to purchase, just to get to work.

When you see petrol prices down the countries being substantially cheaper than anywhere near Dublin, you know they have room for maneuver but they think the public will take sitting down.

So people need to start shopping around a lot better to show them and where necessary limit driving to try to reduce their usage to teach the petrol stations that the public are at the limit of what we can pay for fuel.

Petrol station owners seem to only know how to put the price up though. Petrol does seem to be significantly cheaper in Cork/Kerry than it is in Dublin from last time I was down there.

The reason petrol is more expensive in Dublin is because of higher rents and rates incurred by the service stations in Dublin. There is actually very little of the price at the pump which goes into the pocket of the retailers with most garages trying to remain profitable through their added services such as shops and car washes.

The Consumer Association carried out an investigation into cometition within the fuel industry 2 years ago.

http://www.nca.ie/eng/Research_Zone/Reports/NCA_petrol_and_diesel_price_investigation.doc

Some of it's main findings were....

There is little evidence to suggest unwarranted delays in the passing on of wholesale price changes to the consumer at the pump

...there is relatively modest profit to be made in the downstream supply of refined oil products. Further along the supply chain, statistics measuring the numbers of service stations and fuel outlets in the country point to sustained shrinkage year on year, which would further suggest this is not a highly profitable area in which to operate, at least at the level of fuel supply only. Increasingly, fuel retailers are adding retail outlets to their offerings, thereby enhancing revenue and margin opportunities

A large proportion of the pump price of fuel in this country comprises taxes and duties. The manner of their calculation can depress overall pump cost savings to consumers, notwithstanding drops in the underlying cost of the refined fuel product.

ei.sdraob · 16-01-2011 08:57PM

Permabear wrote: »

This post had been deleted.

Yeh, if they actually build the roads properly in first place it woudnt cost so much to fix them, I should have took pictures today of the floods on Monivea<>Athenry road, you had floods of water pouring from one field to another across the road with a foot of water with potholes underneath.

I heard the average hit over 3$ per (us) gallon few weeks back, not good news, then again you have smaller unemployment problem and an economy that has rebounded. Imagine that, a country where politicians actually care about facilitating job creation.

Permabear wrote: »

Maybe we should all move to the Aran Islands where we can drive electric cars at the government's expense.

I was looking at a Nissan Leaf last week
* 30,000 cost (first 2000 customers subsidized by 5000, so 35000 after)
* free charging point installation for first 2000 customers from esb (??? after)
* 300 euro charging per year for 19000 claimed by the dealer (assuming esb doesnt go up anymore...)
* 150 tax

which is in insane amount of money for an over-glorified micra

alternatively, one can get a luxuriuous/safe/sexy/beastly 2005 bmw 7 series, lets say 750 extra long edition:
* 18000 cost
* can drive anywhere and actually drive dublin and galway back in one day

without spending hours charging (thats if you find a charging station)
* 4000euro @ 20mpg with petrol circa 1.5euro/l
* 1500 tax

that leaves you a nice chunk circa 6-7K in your pocket, you get to nice a nice sexy presidential car and not worry about running out of charge

of course the above is a 5 liter beast, the costs would be much smaller if you go for a run of the mill Corsa which do 60mpg nowadays and more

electrics have a long long way to go, theres an interesting thread over in motors on subject

AlekSmart · 16-01-2011 09:10PM

P. Breathnach wrote: »

We are not currently in a position to cut any taxes by a significant amount.

In addition, I believe that measures designed to minimise fuel consumption are environmentally good.

This is I believe a fundamental cornerstone of the Green Party`s involvement in Government ?

However,at no stage have the same grouping bothered to address the very significant benefits which could accrue from reducing the Taxation Burden on PUBLIC Transport of all modes.

Instead,in the interests of being good Europeans,we removed the most commonly availed tax-break for Public Transport,The Fuel tax Rebate.

This at a stroke made it far more difficult for Public Transport operators to keep their costs under control and remains one of the elements I would IMMEDIATELY reinstate as part of a stimulus package..irrespective of what grumblings come from the EU.

Added to this a many other nasty impositions such as Road Tolls which if we had any real ecologically sensible policies would again IMMEDIATELY be waived for Public Service Vehicles throughout the State.

Small elements which whilst directly benefitting a small number of operators would INdirectly benefit the entire population.

Sadly the present Governments Policies on Public Transport seem set to slash and burn with reductions in State Sponsored Services and by association the private sector as well.

ei.sdraob · 16-01-2011 09:19PM

AlekSmart wrote: »

Added to this a many other nasty impositions such as Road Tolls which if we had any real ecologically sensible policies would again IMMEDIATELY be waived for Public Service Vehicles throughout the State.

Remove them altogether, more people would use the motorway network then and stay off back-roads saving lives. Bad enough we already paid plenty in taxes to build several motorway networks over and not just the single half arsed one we got instead with no reststops and still continue to pay for with tolls

later12 · 16-01-2011 09:19PM

Really it boils down to whether you think that commodities will continue to rise and rise significantly over the coming months, or whether you think there will be a slowdown. I haven't met anyone who has presented a strong enough argument to convince me of either. Most economists simply do not know, as yet.

The global economy is approaching a crossroads. I don't see how the Irish Independent journalist can be so sure about oil prices when banks and investors across the world, with enormously conflicting predicitons are pumping billions of euro into and out of their investments in emerging and developed economies depending on their position.

It's impossible to be clear on this just yet. I wouldn't even give an opinion on an internet forum, because I'd probably be wrong. I saw a signature on boards.ie recently to the effect that the problem with the world is that the most ignorant are usually the most cocksure. I think Bertrand Russell said it. It was the first thing I thought of when I read this thread.

thebman · 16-01-2011 09:36PM

Scarab80 wrote: »

The reason petrol is more expensive in Dublin is because of higher rents and rates incurred by the service stations in Dublin. There is actually very little of the price at the pump which goes into the pocket of the retailers with most garages trying to remain profitable through their added services such as shops and car washes.

The Consumer Association carried out an investigation into cometition within the fuel industry 2 years ago.

http://www.nca.ie/eng/Research_Zone/Reports/NCA_petrol_and_diesel_price_investigation.doc

Some of it's main findings were....

I don't trust the NCA to tell their head from their rear TBH. The first thing in that report is a method of absolving themselves of any scrutiny should their findings be revealed to be nonsense at a later date:

This report has been prepared over a short timeframe, between September and December 2008 by the in-house research function of the National Consumer Agency. In light of the time and resource restrictions, a decision was taken to limit the dataset for analysis to crude oil and downstream product prices between January and December 2008. Whilst analysis over a longer timeframe and using larger datasets may permit greater detail and facilitate identification of even small variances from trend, the NCA is confident that the general trends observable over the period under examination presents a fair reflection of the current state of the Irish consumer petrol and diesel market.

The NCA is just another joke government agency. For example, the whole the reason Ireland is so expensive is Irish consumers don't shop around enough line yet is there any significant analysis to show that Irish consumers shop around significantly less than elsewhere or is this an attempt by the NCA to get out of doing any real work?

I would expect that higher rents in Dublin should be offset by higher volume of business and more competition should drive prices down to minimum profit levels yet they remain out of line with other regions. I don't really believe that all petrol stations in the Dublin area pay massive rents. Many of these stations were in operation before any property boom and I suspect they aren't all just leasing the premises. Some are bound to own the properties their stations are on.

Also at a national level, the retail market shows strong evidence of competition between players. Evidence of this is the low level of profits made by oil companies, the number of stations that have closed in recent years and the increased emphasis on making profit through retail outlets attached to service stations. Based on the data currently available, it is not possible to make conclusions at a county or local level. There are some indications, however, that the market may be more competitive than the UK, such as the number of stations per capita.

So they didn't bother looking at the town/county area level to see if prices were suspiciously similar and so didn't/couldn't investigate any such cases they may have been able to find that might actually show what most consumers suspect is happening which is price fixing at regional/county levels but conclude that because prices are similar all must be okay...

Awesome work there NCA. Its conclusions might be right but they even say themselves, they haven't done a good enough job as the data wasn't available so I guess we'll never actually know.

kippy · 16-01-2011 09:42PM

later10 wrote: »

Really it boils down to whether you think that commodities will continue to rise and rise significantly over the coming months, or whether you think there will be a slowdown. I haven't met anyone who has presented a strong enough argument to convince me of either. Most economists simply do not know, as yet.

The global economy is approaching a crossroads. I don't see how the Irish Independent journalist can be so sure about oil prices when banks and investors across the world, with enormously conflicting predicitons are pumping billions of euro into and out of their investments in emerging and developed economies depending on their position.

It's impossible to be clear on this just yet. I wouldn't even give an opinion on an internet forum, because I'd probably be wrong. I saw a signature on boards.ie recently to the effect that the problem with the world is that the most ignorant are usually the most cocksure. I think Bertrand Russell said it. It was the first thing I thought of when I read this thread.

Okay, the main jist of my post was not really about global factors that cause price rises in fuel. It was about the national factors, for which our government have control over, that add a major cost to the bottomline of fuel in this country and the benefits of them reducing these costs in order to stimulate the economy.

later12 · 16-01-2011 09:54PM

kippy wrote: »

Okay, the main jist of my post was not really about global factors that cause price rises in fuel. It was about the national factors, for which our government have control over, that add a major cost to the bottomline of fuel in this country and the benefits of them reducing these costs in order to stimulate the economy.

Fine, but I was mainly responding to this

There was a report today in the Indo about fuel prices and the fact they would probably hit €1.60 for a liter of petrol in the next couple of months and that this was going to be a major stumbling block for an Irish "recovery".
http://www.independent.ie/business/d...d-2497989.html

I would just love to know on what basis the Indo made that sort of prediction.

With risk analysts and earnings forecasters and wider financial media pacing the floors and scrambling to even take any sort of coherent position on this, I'm sure banks and investors and fund managers across the world would love to know how the Indo can make such informed predictions. It's way beyond the realm of realistic predictions for now.

ei.sdraob · 16-01-2011 09:56PM

later10 wrote: »

I would just love to know on what basis the Indo made that sort of prediction.

There was something on the radio as well earlier today about 1.60, not only the indo is going on about this it seems

Trampas · 16-01-2011 09:58PM

jimmynokia wrote: »

the price of petrol and deisel in this country is a fcukin joke.

what is it in the uk?

kippy · 16-01-2011 10:03PM

later10 wrote: »

Fine, but I was mainly responding to this

I would just love to know on what basis the Indo made that sort of prediction.

With risk analysts and earnings forecasters and wider financial media pacing the floors and scrambling to even take any sort of coherent position on this, I'm sure banks and investors and fund managers across the world would love to know how the Indo can make such informed predictions. It's way beyond the realm of realistic predictions for now.

Its irrelevant really where they get their information from, it may well be pure pie in the sky, however the base cost of fuel is going to continue to go up over the next few decades. To suggest otherwise is to not understand the finite nature of hydrocarbons and the increasing requirement from massive developing nations for it.
Even without that, we pay a lot for fuel and we have a direct impact on that cost.

Even without the report, forget about it, my post was just prompted by it and the fact that the indo failed to recognise that we have a part to play in the cost of fuel.

P. Breathnach · 16-01-2011 10:18PM

AlekSmart wrote: »

This is I believe a fundamental cornerstone of the Green Party`s involvement in Government ?

It may well be, but I adopt the position as an independent who has no link to any party.

However,at no stage have the same grouping bothered to address the very significant benefits which could accrue from reducing the Taxation Burden on PUBLIC Transport of all modes...

That's a fair point, and worth considering.

P. Breathnach · 16-01-2011 10:20PM

ei.sdraob wrote: »

Not the first time he tries to insult me,says more about person making claim

Wrong. If you believe otherwise, you should report my post.

Joe 90 · 17-01-2011 12:44PM

ei.sdraob wrote: »

Remove them altogether, more people would use the motorway network then and stay off back-roads saving lives. Bad enough we already paid plenty in taxes to build several motorway networks over and not just the single half arsed one we got instead with no reststops and still continue to pay for with tolls

You don't really think that the government wants you to stay off the back roads and use motorways where you will use less fuel?
Another thing that really pisses me off when I am at home is how long it takes traffic lights to cycle in Ireland. Someone presses the button to cross a road and traffic stopped for 5 minutes. When I was young and lived in Donegal I used to see only one set of lights in the Republic between Donegal and Dublin I didn't care but these days with lights everywhere it must burn a helliva lot of fuel and raise a commensurate amount of tax.

Fuel Prices in Ireland

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