Consumer prices soar again
Rocketing petrol and heating-oil prices hit cash-strapped workers hard
CONSUMERS opening lighter pay packets this month are being hit with a double whammy as soaring fuel prices push up the cost of living.
New inflation figures show that petrol prices have rocketed by 18.6pc in the last year, diesel is up 22.4pc and home-heating oil has risen by a massive 33.9pc.
The impact of these rises has been to push annual inflation up to 1.3pc for 2010, with prices nudging up by 0.2pc in December alone.
This means that the cost of living is rising at its fastest pace in over two years, and analysts predicted more pain ahead, particularly if the European Central Bank goes ahead with its threat to raise interest rates to try tocurb Europe-wide inflation.
And it comes as families nationwide feel the impact of the Budget on their wallets this week, as tax and PRSI hikes knock up to €180 off their monthly wages.
The Central Statistics Office figures show that housing, utility and transport costs rose most steeply during 2010.
By contrast, the price of clothes and shoes fell by more than 4pc, while alcohol and education costs both fell by 3pc.
Home heating oil rose by 11pc during December alone, meaning householders needing a refill after the lengthy cold spell have to fork out close to €790 for 1,000 litres -- compared with around €550 a year ago.
Independent website Cheap-estoil.ie said home oil prices were at their highest in over two years and, since the introduction of the carbon tax last year, consumers here now paid three times more tax on their oil than people living in the North.
Petrol prices also soared by 7.1pc in December, partly because of a 4c increase in excise duty, while diesel rose by 6.3pc in the month, again with a 2c excise hike.
It now costs as much as €1.48 per litre to fill up, with analysts predicting petrol prices could breach the €1.50 mark in coming weeks -- although consumers may find some relief as a few garages have cut prices by 1c in recent days.
The Irish Small and Medium Enterprises Association (ISME) said higher transport costs would increase business costs, which could be catastrophic for small firms, adding that excessive costs must come down.
"The decision to introduce a carbon tax should be reversed as a matter of urgency," said ISME chief Mark Fielding.
But though Ireland is now the only European country that is still seeing price falls as measured by the slightly different HICP index, which excludes mortgage interest, analysts have warned against complacency.
Bloxhams economist Alan McQuaid said international factors could fuel inflation despite the Budget cuts, which should keep Irish prices down.
"Central banks are pump-priming at the most aggressive pace in decades, governments are hiking sales taxes, food and energy costs are surging, and yet there seems an air of complacency about inflation risks.
"There's no doubt that the upward trend in global commodity prices, if maintained, has the potential to push Ireland's headline inflation rate higher in 2011 than what analysts are currently projecting," he said.