Marked gas oil (MGO), or green diesel as it’s otherwise known, climbed by 1c/l (excluding VAT) on Thursday 1 June as a result of the Government’s phased reintroduction of fuel excise duty.
This marks the first instalment of the three-stage phased restoration. White diesel has also gone up 5c/l while petrol has gone up 6c/l (including VAT) as a result of the excise duty reinstatement.
On 1 September, another 1c/l is to be restored on green diesel, 5c/l on white diesel and 7c/l on petrol, again inclusive of VAT.
The final instalment of the fuel excise duty restoration will hit the hardest. On 31 October, excise on green diesel will be upped a further 3c/l, 6c/l on white diesel and 8c/l on petrol (including VAT).
In levies alone, green diesel will have jumped 5c/l including VAT come 1 November. While white diesel and petrol will receive significant increases of 16c/l and 21c/l including VAT. This follows on from an earlier return of the NORA (National Oil Reserves Agency) levy in March and carbon tax increase earlier in May, bumping up prices by 2.04c/l and 7.6c/l.
Regardless of what the market price will be come November, one thing for sure is that green diesel prices are on track to have increased by 12.74c/l from the start of the year until 1 November, based on excise duty and carbon tax increases alone.
However, it’s important to note that these reimposed fuel excise duties had been temporarily reduced last year by the Government in response to the increased cost of living and soaring fuel prices witnessed as a result of Russia’s invasion of Ukraine.
Diesel prices have remained steady in recent weeks even with the increased demand. As we went to press this week, suppliers were quoting between 89c/l and 92c/l (VAT inclusive) for green diesel. While prices are back 45-50c/l (VAT inclusive) on last year’s highs of €1.49/l experienced during first-cut silage season, diesel remains a significant cost to farmers and agricultural contractors, especially as levies are restored.
International oil markets remain steady for the most part and are back from the April highs.
After OPEC and Russia announced the reduction of daily output by over one million barrels in early April, prices surged to highs of $87/barrel. Since then, the market has resumed to levels pre the announcement and remain steady for the most part.
On Tuesday evening as we went to press, Brent crude was trading between $74 and $76/barrel, down slightly from last week’s average of $77/barrel. Prices are back to levels seen before the Russian invasion of Ukraine, to put the current prices into context.
In June last year Brent crude peaked at $127/barrel.