Diesel prices are steady, but world oil markets are nervous

This week, quotes for bulk quantities of green diesel are hovering around the 98c/l including VAT mark. As we went to press this week, prices being quoted for orders in the region of 1,000l-plus of green diesel, or marked gas oil (MGO) as it’s more formally referred to, were ranging throughout the country from 91.9c/l to €1.02/l, including VAT. Despite a 1.5c/l increase at the beginning of the week, the Irish Farmers Journal fuel survey has noted an average price of 97.8c/l.

Speaking to fuel suppliers, all alluded to the uncertainty in the market, largely down to Trump and the implementation of further potential tariffs.

One supplier in the east of the country explained: “Although green diesel prices are remaining steady, fluctuating in and around the mid 90c/l over the last month, the world oil market is very nervous. Oil prices are around $70-75/barrel, but it just takes Trump or Putin to make one move and oil prices could jump by $10/barrel.”

Brent crude

Brent crude was trading between US$74/barrel and US$75/barrel at the time we went to press. Prices have climbed to a monthly high as result of geopolitical tensions, which are causing fears of supply disruptions. A large amount of the market uncertainty is driven by the US president’s widening trade war.

Trump’s administration has vowed to impose secondary tariffs on buyers of Russian oil if it feels Moscow is hindering its efforts to end the war in Ukraine – putting key buyers of Russian oil, such as India and China, under pressure. Meanwhile, stricter US sanctions on Iran and Venezuela could also constrain global supply.

However, experts have said that potential supply risks may cushion oil’s decline following Trump’s latest threats against Russia and Iran.

As a general rule, fuel price fluctuations tend to trail behind crude oil market prices. For example, a drop in Brent crude today may not make its way down to depot or forecourt level for weeks. But remember, oil is traded in dollars, which means currency fluctuations have a huge impact on pricing.

Carbon tax increase on the way

As part of the 2020 Programme for Government, it’s committed to increase the basis of carbon tax rates from €26 to €100/t of carbon dioxide by 2030. Finance Act 2020 legislated for annual increases to the carbon tax of €7.50 up until 2029 and €6.50 in 2030, when the rate will reach €100 per tonne of carbon dioxide.

These increases impact on the main propellant fuels each October and on all other fuels on 1 May the following year. Budget 2025 has seen the rate of carbon tax increase by a further €7.50/t, from €56/t to €63.50/t. This means the hike on green diesel will kick in on 1 May 2025.