Shock as heating oil soars €300
Published 23/11/2011 | 05:00
HOME heating oil has shot up in price by €300 for a tank refill, new figures reveal.
Suppliers and consumer groups said households would not be able to withstand a hike in carbon taxes on the fuel in the Budget.
And consumers could also be hit by a final decision to apply carbon tax on coal and briquettes, a move that could see prices shoot up. Carbon tax for coal and briquettes was first announced by the Government in December 2009, but it has never been applied.
It is estimated 800,000 households heat their homes using home heating oil, or solid fuel such as coal and briquettes, or a combination of both.
Carbon tax already adds 8.4pc to the price of 1,000 litres of kerosene. This means the tax adds up to €75.
VAT is also applied at 13.5pc on home heating oil, coal and briquettes. The combination of carbon tax, VAT and rising world oil prices means it now costs around €900 to fill a 1,000-litre tank. This is up from €580 in 2006, suppliers say.
Since last year, the cost of 1,000 litres has jumped by €150.
Finance Minister Michael Noonan has already signalled a rise in carbon taxes in the Budget.
Heating suppliers said yesterday that households were restricting the number of tank fills they got each winter to just two, down from three in the last few years.
And many families were ordering smaller amounts. This has forced most suppliers to decline to deliver less than €250 worth of oil to households.
Thefts of heating oil have become commonplace, according to the Solid Fuel Trade Group, which represents distributors of coal and briquettes.
Any move to hike carbon tax in the Budget would lead to an explosion of imports from the North and a rise in smuggling, Michael Leahy of the Solid Fuel Trade Group said.
There is no carbon tax across the border while VAT on coal is lower at 5.5pc.
Mr Leahy said the Government should keep its hands off home heating fuels.
"Homeowners are already rationing heat. Homes are now heated depending on cashflow and not temperature," he said.
And chairman of the Consumers Association, Michael Kilcoyne, said people were already struggling with hikes in ESB electricity prices of 15pc.
"Carbon tax will hit people hard. It is just a tax by another name as the Government is not concerned about the ozone layer," Mr Kilcoyne said.