Tuesday, May 28, 2024

Price increases in store for consumers from Monday

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Inflation in Ireland has fallen significantly in recent months, but a number of cost increases will weigh on consumers from next Monday.

From midnight on 1 April, the cost of petrol, diesel and marked fuel oil (green diesel) will rise.

It is the latest step by Government to restore excise rates to the levels they were at before a temporary cut was introduced two years ago.

Filling up at the pumps on Monday will cost you an extra 4 cent per litre of petrol, 3 cent per litre of diesel and 1.5 cent on marked gas oil.

In March 2022, as fuel prices soared after the outbreak of war in Ukraine, then Minister for Finance Paschal Donohoe announced a steep reduction in excise.

The temporary cut immediately saved motorists 20 cent per litre of petrol and 15 cent on diesel. The reduction has been gradually unwound in the period since.

Monday’s increase will be the second last step, with one final rise to come in August. For consumers who are dependent on their private cars, it is bad news.

Since last March, fuel prices have seesawed, and just when they are trending down again, the excise increase has fallen due.

Despite criticism of the move from opposition politicians and consumer groups in recent days, Government ministers signalled there would be no change to the planned excise restoration.

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Minister Donohoe defended the restoration of the excise duty on fuel.

Speaking on RTÉ’s Today with Claire Byrne, he said when excise reductions were introduced over a year ago the price of fuel was “well in excess” of €2 per litre.

“Even though the price of fuel is higher than we would want it to be, it is far, far lower than when we brought in these initial changes.

He said if they were not to go ahead with the excise increase, the Government would have to change plans “elsewhere”.

He said every other tax has gone up in value also.

“Why we are collecting more excise is because our economy is bigger than it ever has been before,” he said.

The minister said he accepts that the increase creates costs for people when inflation is still an issue but said the Government spent hundreds of millions “taking down excise when fuel was well above €2 a litre.”

Sinn Féin’s Spokesperson on Finance Pearse Doherty called for the planned excise duty increase to be delayed and reviewed at the end of the year.

Speaking on the same programme, Mr Doherty said: “All of these excise duty increases need to be kept under review given the cost of living crisis.

“It’s very clear that people are still really suffering, under severe pressure,” he said.

He said that if the price hikes go ahead, particularly those in border counties, consumers will buy their petrol and diesel in Northern Ireland.

Mr Doherthy added that as a result, businesses on the border may not survive.

Aontú leader Peadar Tóibín said the “idea of hiking up” excise duty is “absolutely wrong” and “punitive” on people.

Speaking on RTÉ’s Morning Ireland, he said the Government is “raking it in” in terms of taxes on fuel and criticised its reason to restore excise duty “to change people’s behaviour”.

CEO of Fuels for Ireland Kevin McPartlan said the plans will substantially increase the retail cost of petrol and diesel.

“We’re going to see an increase in excise duty on Monday, we’re going to do the same in August, we’re going to have the carbon tax increase in the Budget and we are going to have an increase in the amount of biofuels we have to blend into road transport fuels from the 1 January.

“So, if everything else remains the same, such as the cost of crude, the cost of refining, the cost of transport, we are looking at an increase in the price of petrol of 15c per litre and diesel by 12c a litre.

“We think that is going to be a problem for a lot of families and a lot of businesses around Ireland,” he said.

Fuels for Ireland is calling on Minister for Finance Michael McGrath to establish an expert group of stakeholders, including industry and environmentalists, to review fuel pricing in the context of transport and heating.

Mid-contract mobile, broadband increases

From Monday also, many consumers will see the cost of their broadband, mobile and television services increase substantially.

Eir, Vodafone, Sky Ireland and Three will all be increasing monthly prices on their plans, ranging from €2 to €8 depending on which provider and which plan is used. There will be increases coming later in the year for Virgin Media services too.

In the case of eir, Vodafone and Three, the increases will be brought about as a result of a clause in customer agreements that provides for annual increase in fees.

These companies will add 7.6%, a figure based on the consumer price index (CPI) in January of this year which was 4.6% and an additional 3% added on top.

In a statement to RTÉ News, Eir said that like all telecommunications companies, it has experienced significant cost increases in recent years and “while these costs have been absorbed and managed where possible, it has been necessary to pass on some of these to customers”.

On its website, Vodafone said it is faced “with growing pressures due to inflation and increased demand to invest in our network so we can deliver reliable connectivity and the best customer experience possible.

“But these mid-contract price annual increases are new to the market in this country, having only been first used here in 2021.”

ComReg, which is the statutory regulator of the electronic communications sector, has expressed concern about such increases from a consumer protection perspective. However, it currently has no role in regulating prices.

The Department of Communications said that consumers should use price comparison websites “to find the best value contract for their needs”.

In a statement, it said the use of price-adjustment clauses by the majority of mobile and broadband providers has, in recent years, become more common and these clauses generally operate by providing for annual automatic price increases during the lifetime of the contract.

In 2015, the European Court of Justice ruled that an increase in telecommunications charges in accordance with the CPI does not allow subscribers to withdraw from their contracts.

The department said it is assessing the use of these clauses, and is engaging with the Commission for Communication Regulation (ComReg) and other stakeholders.

However, any proposal to legislate to prevent retail providers from offering variable priced contracts – based on the CPI – would require careful consideration, the department added.

Sinn Féin’s Pearse Doherty strongly criticised mid-contract price increases and has called for Government action to outlaw them.

“We need to ban this practice, where companies are increasing the price of contracts in the middle of the contract,” he said.

“It’s already going to be banned in the north and in Britain. The regulator agrees with me that this practice has to stop and if the Government won’t act then we will act for them.”

Mr Doherty has produced legislation to ban the practice, which he will propose in the Dáil if the Government does not take action.

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