Green diesel prices have continued to trend upwards in recent weeks, jumping by 12c/l or a monthly increase of 11%.
This week, as we went to press, prices of €1.17/l to €1.20/l (including VAT) were being quoted for bulk quantities of green diesel or Marked Gas Oil (MGO), as it’s otherwise known.
Since the early days of July, bulk prices have jumped by as much as 35% in percentage terms. This equates to a total increase of 31c/l (including VAT) since the harvest campaign kicked off in July.
To put current diesel prices into context, green diesel at its dearest last year, peaked at €1.60/l during June 2022 for a brief period before bottoming out this July at 89c/l.
Adding fuel to the fire
Contributing to price increases at more local level are the phased reinstallation of Government excise duties. The first instalment of the phased fuel excise duty return on green diesel was implemented on 1 June when 1c/l was added followed by the second 1c/l instalment on 1 September. The final and largest reinstalment is yet to come on 31 October when green diesel will be faced with a further 3c/l increase. At this point, a total excise duty of 5c/l will have been reinstated onto green diesel prices regardless of the other factors driving up prices. The duty had temporarily been lifted by the Government last year in light of soaring diesel prices as a result of Russia’s invasion of Ukraine.
Based on reinstated levies and carbon tax increases alone, green diesel will have increased by 9.04c/l come 1 November. This breaks down to the reinstated National Oil Reserves Agency (NORA) levy of 2c/l in March, Budget 2023 carbon tax increases of €7.50/t from €41/t to €48.50/t of Co2 which added 2.04c/l to green diesel back in May and the reintroduction of the fuel excise duty. The upcoming Budget 2024 in October is set to add further pressure on the commodity with fresh carbon tax increases likely on the cards.
Brent crude, the international oil benchmark at the time of print was trading just north of $91/barrel, the highest price witnessed for the year to date, following fresh Saudi and Russian crude output cuts. Both Saudi Arabia and Russia last week announced that they will extend voluntary supply cuts of a combined figure, believed to be 1.3 million barrels per day, until the end of the year.
Earlier in June, Brent crude experienced a 12-month low of $72-73/barrel, a range difference of $18-19/barrel in just four months.