Emmet Stagg (Kildare North, Labour)
Link to this: Individually | In context

Question 22: To ask the Minister for Communications, Energy and Natural Resources his views on calls from an organisation (details supplied) for an investigation into the increase in the price of diesel over petrol prices; the measures he will take to address the rising cost of diesel; and if he will make a statement on the matter. [28011/08]

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

The Irish oil industry is fully privatised, liberalised and deregulated. There is free entry into the market, and prices at the pump for both petrol and diesel reflect market factors notably global market price, transportation costs, Euro/Dollar fluctuations and other operating costs. The significant price rises of recent months reflect the exponential increase in global oil prices.

In so far as the relativity between the price of diesel and petrol is concerned, traditionally, diesel has been less expensive than petrol at the forecourts in Ireland. This was due to the fact that the international prices for both products were previously at a similar level, and excise duty was and is lower on diesel. European production was also closely matched to demand for both products. The international price of diesel has, however, increased relative to petrol for a number of reasons including rising demand in both Europe and in China and other rapidly-developing economies world-wide. European refineries are unable to keep pace with the demand for diesel. Each barrel of oil can only produce a certain percentage of diesel, and European diesel demand now exceeds production. This means that diesel has to be sourced from further afield, particularly from Russia, thus affecting price.

The increase in the price of diesel is affecting all of Europe. Ireland, according to recent EU data, has the 9th lowest petrol prices and the 12th lowest auto-diesel prices out of the 27 EU Member States. It is mainly the newer Member States that have lower fuel prices than in Ireland. These comparisons demonstrate that Ireland is by no means the worst affected country in Europe in relation to the retail price of diesel and petrol.

The upward global trend in oil prices reinforces the imperative for Ireland to reduce its oil dependency and to use energy wisely and efficiently. The Government is committed to accelerated delivery of our targets for renewable energy and energy efficiency which are essential to ensure a sustainable energy future for the economy and consumers. My Department is working with other key Government Departments on initiatives to accelerate the deployment of renewable energy in electricity, transport and heating, and to implement major energy efficiency and demand management programmes.