Green diesel prices have taken a considerable jump over the past month, with further tax increases on the way. Prices of €1.08/l to €1.13/l (VAT inclusive) were being quoted for marked gas oil (MGO), better known as green diesel, on Tuesday as we went to press.
Prices have climbed by as much as 24c/l since the first week in July, when quotes were ranging from 89c/l to 96c/l (VAT inclusive).
At that time, prices had crept up marginally, but remained stable overall since earlier in the spring when they first fell below the €1/l mark.
On average, green diesel prices have risen by 19.5% in the past six weeks. The jump in prices is linked to a cut back in diesel production.
More increases on the way
Unfortunately for farmers and contractors alike, there is further bad news regarding fuel prices on the horizon.
Green diesel prices are set to be hit with a further 1c/l hike on 1 September, followed by a further 3c/l increase on 31 October, when the second and third instalments of the Government’s phased reintroduction of fuel duty cuts come into effect.
The first reinstalment was introduced on 1 June, but the impact wasn’t as hard felt, given the market situation at the time.
Last year, the Government responded to the soaring fuel prices as a result of Russia’s invasion of Ukraine by temporarily removing the excise duty on fuels, which is now being reintroduced on a phased basis.
Regardless of what the market price will look like come November, one thing for sure is that green diesel prices are on track to have increased by 7.04c/l between the start of the year and 1 November, based on the reimposed excise duty and carbon tax increases alone.
The latter added a 2.04c/l increase to MGO prices from 1 May as a result of the carbon tax increase of €7.50/t from €41 of CO2 to €48.50/t of CO2 announced as part of Budget 2023.
White diesel and petrol
White diesel and petrol will also face further increases as a result of the restoration of the excise duty. On 1 September, white diesel will increase 5c/l and petrol 7c/l, followed by a further 6c/l and 8c/l respectively on 31 October.
This follows the earlier increase of 5c/l and 6c/l on white diesel and petrol from the first reinstalment in May.
White diesel and petrol will have increased 16c/l and 21c/l respectively by 1 November, based on excise duty alone.
With white diesel currently trading in the region of €1.69/l at pumps.
Brent crude, the international oil benchmark, closed last month at its highest level since April at between $85 and $86/barrel.