Price of home-heating oil at highest price since 1996 amid Middle East war

The price of home-heating oil rose by 67.5 per cent in March when compared with February, the largest ever month-on-month increase, according to data from the Central Statistics Office (CSO).

The increase exceeded the previous biggest monthly rise of 58.4 per cent seen in March 2022. Compared to 12 months ago, home-heating oil prices were up by 63.3 per cent.

The price of home heating oil was at its highest level since the CSO started publishing detailed sub-indices in 1996.

Diesel was at its highest level since July 2022, while the price of petrol was at its highest level since August 2022.

Fuel protest organisers are taking part in a third day of a nationwide demonstration on Thursday, with blockades and slow-moving convoys causing significant disruption across the country.

Energy prices have spiked in recent weeks, amid disruption to global fuel supplies stemming from the war in Iran and the Middle East.

Kerosene is the main heating fuel for 26 per cent of people in Ireland, making it the second most important household heating source after natural gas, which is used by 33 per cent. A further 7 per cent of people use diesel, gas or oil.

The Competition and Consumer Protection Commission said on Thursday that at least 70 per cent of the retail price of home heating oil is typically driven by wholesale costs, The Irish Times reported.

“In January … approximately 22 per cent of average retail prices were made up of fixed duties and levies,” it said.

“Allowing for supplier costs and margin, this means that around 70 per cent or more of the retail price is typically driven by wholesale costs.”

It said home heating oil providers do not typically store large quantities of oil, which means retail prices on a given day are largely determined by the prevailing wholesale prices, meaning retail prices can change “very quickly and very significantly” in response to cost shocks.

The CSO data has also shown that the price of diesel and petrol increased by 18.1 per cent and 7.7 per cent respectively in the month, while they were up by 16.5 per cent and 5.7 per cent in the past 12 months.

The national average price of diesel in March was €2.05 per litre, a price increase of 31 cents compared with February. Only June 2022 (€2.09) and July 2022 (€2.07) had higher average prices for diesel.

The average price of petrol was €1.88 per litre in March, up 13 cents in the month, the highest average price since August 2022, when it stood at €1.91. The highest ever average price for petrol was in June 2022 when a litre cost €2.15.

The CSO said it should be noted that prices for the month were collected in mid-March and before the Government measures on energy costs were introduced.

Headline inflation in the economy increased by 3.6 per cent in the 12 months to March, up from an annual increase of 2.7 per cent in the 12 months to February, the highest annual rate of inflation since January 2024, when it was 4.1 per cent.

In total, fuel and home heating oil contributed 0.9 percentage points to the overall inflation rate in the month.