Personal Finance: Sharp Rise In Price Of Home Heating Oil
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Why is the price of home heating oil spiking and who is feeling the impact?
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Charlie Weston, personal finance editor of the Irish Independent. We talk a lot about the price of petrol and diesel at the pumps. But what about the price of home heating oil? Because it looks like the government is starting to get really worried about that.
Yeah, Matt, there has been serious increases, ridiculous increases. You're talking in the last six weeks, a 32% increase for 500 litres of home heating kerosene, as it's called, same fuel that's used in jets. 500 litres is now about €840. That is €200 more than it was six weeks ago. So €200 more. Now, the fuel distributors tell me, a lot of people are ringing up saying, how much would it be for 200 litres or how much would it be for 300 litres? Normally this time of the year, the 700,000 people who have home heating oil would be filling up, they'd be getting 1,000 litres to try and get them in a good way through the winter.
How much did a 500‑litre fill of heating oil cost after the 32% price jump?
But that ain't happening this year. It's just so expensive, people are just shocked by it. They didn't order anything over the summer. Sometimes they would order a small amount over the summer just to spread payments around a bit. But it's just so blinkin' expensive. So the government is saying now, they're getting very worried, they were saying it particularly at the ploughing yesterday, we're going to do something for home heating oil people. Nothing has been done for them. You know, gas and electricity, the VAT on that is at a reduced rate. It's down from 13.5% to 9%. That's the very least that could be done. Equalise the VAT rate, the VAT rate for... home heating oil, make it the same as it is for gas and electricity.
So that's one thing that they'll probably have to do. There isn't a whole lot of duty on it. Well, the other big charge is carbon tax. I mean, that's been postponed.
What government measures are being discussed to lower heating‑oil costs?
It was due to go up on the 1st of May, would have added another 19, 20 euros to a 1,000 litre fill.
Due to go up in the 6th, or just
after the 6th of October, isn't it? It is, Matt. Yeah, they've postponed it. I don't think they can do that one because, I mean, already carbon tax accounts for about 150 euros of a thousand litre fill. So, you know, I think they're in trouble on that one. So what they did in England is a weird one, is they paid people money. They kind of sent them checks. Similar in England, it's very much a rural thing in England where people have home heating oil. In this country, tends to be rural households. tends to be lower income, tends to be older people, tends to be people who have not done a retrofit. And so they're spending a lot of money on home heating oil to heat their homes over the winter. And, you know, in towns and cities with town gas, it's, you know, it's a different prospect altogether.
So very much rural urban divide here, Matt.
Can the government really give people a discount on their home heating oil and not give it to those who don't use home heating oil, who use gas or electricity?
Well, that's the problem.
Can adjusting the VAT rate on heating oil make a difference for households?
They have a massive dilemma here. It's not an easy one to solve. That's why they haven't touched it up to now. I mean, previously they were going on about all the EU regulations won't allow us to kind of adjust the VAT rate on home heating oil or some of the duty. But, you know, and Sinn Féin have been making hay on this one, telling them to do it. I think they're just going to have to do something. What they come up with, they're going to have to be inventive here. As I say, the VAT is one thing they could do. I think they're going to have to postpone the carbon duty increase on home heating oil again. And they may find themselves trying to do some kind of a targeted system for people who have home heating oil, who are very heavily exposed to big, big increases in the cost of heating their fuel, heating their homes this coming winter.
Okay, it's
a very,
very difficult one. And we'll see what happens. And there's no sign that the price is going to drop.
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Chapters
8 chapters
1
Why is the price of home heating oil spiking and who is feeling the impact?
0:00–1:03
2
How much did a 500‑litre fill of heating oil cost after the 32% price jump?
1:03–1:53
3
What government measures are being discussed to lower heating‑oil costs?
1:53–2:55
4
Can adjusting the VAT rate on heating oil make a difference for households?
2:55–3:56
5
Why is the postponed carbon tax increase crucial for heating‑oil prices?
3:56–4:57
6
How do rural, low‑income households depend on heating oil compared to urban gas users?
4:57–5:43
7
What lessons can be learned from England’s direct‑payment scheme for oil users?
5:43–6:42
8
How might changes to feed‑in tariffs and solar panel payments affect energy costs?
6:42–8:20
Speakers
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