Over the course of the past two weeks, the price of green diesel has once again sky-rocketed as a result of the return of heightened tensions in the Middle East.

This week, as we went to press, quotes for bulk orders of green diesel or Marked Gas Oil (MGO) ranged from €1.34/l including VAT to €1.40/l including VAT.

This marks an increase of as much as 38c/l in the space of a month, when prices had fallen to lows of €1.02/l including VAT, following the announcement of peace talks between the US and Iran, all of which proved short-lived.

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Despite this recent rise, green diesel prices have somewhat eased on last week’s high, when prices were quoted up as high as €1.44/l including VAT.

One Carlow fuel supplier said that his local tillage farmers got caught with high fuel prices at sowing and once again, are getting caught with high fuel prices in the middle of the busy harvest.

Troubles in the middle-east

The resumption of hostilities and the fresh closure of the Strait of Hormuz has once again driven crude oil prices significantly higher.

At the time of writing, brent crude was trading at $84/barrel, almost 20% higher than what it had been trading for when a peace deal looked likely.

With the rise in diesel prices out of kilter with brent crude prices, experts have indicated that there is more than the conflict in the Middle East at play.

Russian influence

Diesel future prices have increased at a faster pace than the crude prices, with fingers being pointed towards Russia. Ukrainian forces have increased their attacks on Russian fuel infrastructure, reducing its capacity to levels not seen since 2005.

This has led to fuel shortages in some parts of Russia and a ban of exports of Russian oil.

Although Europe banned Russian fuel imports early on in the Russia Ukraine war, the current situation still has an effect on global fuel prices.

With low levels of storage here in Ireland, the impact tends to be felt rather quickly, which has been reflected at the pumps and on bulk fuel deliveries to farmers and contractors.

Fuel excise cuts extended

While the Government has already extended the cuts in fuel excise duties and levies on diesel, until 1 September, there appears to be no willingness to reduce carbon taxes on fuel beyond this point.

These excise cuts are worth 27c/l on petrol, 32c/l on diesel and 7.4c/l on green diesel and were due to expire on 31 July, before being extended.

As things stand, from the 1 September, the previous rates will be gradually restored over the following four months.