Supply and cost fuelling oil concerns

RATIONING of home heating oil and agri-diesel, as well as spiralling costs, are causing considerable anxiety according to Councillor Alan O’Callaghan. The Kilmurry man, who runs a busy fuel supply company, said that while home heating oil is limited to 500 litres, on Friday of last week, the price for that was more than €800. With price volatility prompted by the global economic fallout from the war Ukraine, there are no guarantees that prices will stabilise any time soon. For those using agri-diesel, rationing, costs and fuel quality are looming problems. 

“These are times that we’ve never witnessed before,” the Fianna Fáil member said. “Prices might have been fluctuating a few cents over a couple of days, now they’re moving ten cents a day. It’s a very volatile market right now. For the supplier, the buyer and the distributor, it’s the luck of the draw. I delivered kerosene to a house on a Monday and, if that man had got the delivery the following Thursday, he’d be paying €185 more. That’s on 500 litres. That man had ordered oil previously at Christmas. If he bought the same amount today, he’d have give €590 more.”

While Councillor O’Callaghan said there is some hope for domestic customers with the arrival of milder weather, he has serious concerns for those buying agri-diesel. Ninety percent of his customers are homeowners, but the ten percent of business and farming customers need massive volumes of fuel. “I could fill a lorry there and that could supply 15 kerosene customers,” he outlined. “A lorry load would only supply three agri-diesel customers, because they’re buying thousands of litres. It’s going to be worrying for agricultural contractors. There are three issues now and those are availability, quality and price. A lot of the fuel coming in was through Russia. For the last few years, the quality of agri-diesel has been pretty good, but if it’s going to come from different refineries, I’d be nervous of the quality of the fuel. With machinery today being so highly tuned and very expensive, it’s not able for much hardship as regards the quality of diesel. Lower standard fuel can affect injector pumps, build-up in the tank and other problems. Older tractors were a bit more lenient in terms of fuel quality. So, whatever about the price of fuel, damaged injectors could cost thousands of euros to repair. That’s another worry. There’s going to be huge demand for alternative supplies and then you could have quality issues.”

With activity ramping up for farmers and contractors, these concerns are likely to come to a head very soon, Councillor Alan O’Callaghan said. “There’s a bit of slurry to be done now and fertiliser and some people aim to have a first cut of sileage, if the weather is favourable, around May 15. It’s not that far away. Rationing is an issue. I’m getting a certain allocation and we’re able to supply to our customers for what they’re doing at the moment and they’re seeing out the foddering season. Going forward, we’ll just have to see what supply is going to come in and from where. I can see people’s frustration at the minute.”

With his own party leader, Taoiseach Micheál Martin criticising price hikes at fuel pumps, after the government’s intervention to bring them down, Councillor O’Callaghan take a more balanced view.

“I can see it from both sides,” he said. “If you take someone with a petrol station. They might not be able to get fuel in and then when they do, they might have had to buy it a higher price. They have to sell it at a higher price. Suppliers don’t know the price until the day it’s delivered. Five or six years ago, the price was set on a Wednesday and again on a Friday. There was a bit more certainty and only two prices a week. That all changed and you have six prices a week.”

The government has cut excise duty on motor fuel, but Councillor O’Callaghan said more could have been done. “I think a percentage cut per litre of fuel could have been better,” he said. “At least for kerosene customers, they might not need to order again until September. Outside of that, we are all watching and waiting.”