Why Gas And Fuel Prices Are Rising Globally

Different events around the world have affected fuel prices across the globe. From June 2022, Ireland has seen an average increase of 750 euros annually, a significant rise compared to the fuel cost last year. 

The consistency of events happening worldwide can also see fuel prices rising considerably as the year rolls on. Currently, Ireland is the 17th most expensive country in the world for fuel (ranking 12th in Europe). 

Events Around The World Affecting Fuel Prices 

There have been a number of events around the world that crucially affected fuel prices in Ireland and beyond. The cost for gas and fuel has been steadily increasing since the 1980s when it sat around 36.7p a litre. Economic reforms introduced by Soviet Union leader Mikhail Gorbachev started affecting fuel prices, increasing to 42.8p in 1985. 

Between 1990 to 2000, fuel differed in terms of costs, landing at 76.9p per litre in 2000. This was due to the fuel duty escalator<, a new fuel duty policy that aimed to reduce the number of cars on the road (as a response to the increase in pollution from road transport). This new policy initially set fuel duty at 3% above inflation, reaching 6% before being suspended. 

2010 saw the highest petrol prices due to the introduction of fuel duty, and VATs. The cost of fuel overall averaged 110.2p per litre, shooting up to 138.9p by 2013. In 30 years (from 1983 to 2013), the price of petrol rose by £1.02 per litre, a 116% increase give or take. 

Between 2019 to the current year, there have also been major events that affected fuel prices

COVID-19 Outbreak 

According to OECD, the lack of demand for fuel due to the disruptions related to COVID-19 has a slowdown in the production of oil, producing a significant drop in global demand for fuel. So interestingly, the fuel price was down (approximately 30% worldwide), a price that was not seen since the 1990s. 

The rebound stage (when people were allowed to go into shops without limitations, masks, etc.) saw demand increasing as people were able to travel, use transport, and so on. 

The Russian Invasion of Ukraine

The Russian invasion of Ukraine saw fuel prices for various countries significantly increase. This is mainly due to the ban on oil, natural gas, coal and petroleum products from Russia.The  USA, for example, showed their support for Ukraine by banning imports from Russia, with the same move being made by the UK and other countries. 

This leads to a significant rise in gas demand, with oil prices in Dublin charging more than 2 euros per litre in 2022. 

How Much Gas Does Ireland Get From Russia

Russia is the biggest natural gast exporter, exporting over 230 billion cubic meters in 2020 alone. In 2021, output reached 10.5million barrels per day, making up 14% of the world’s total supply. 

According to Trading Economics, Ireland received $300 million worth of exported products, with over half of that amount from mineral fuels, oils and distillation products in 2020. 

Overall, the impact of production from Russia to Ireland has been significantly affected by the Russian Invasion. 

In short, the reason for the increasing costs in gas and fuel prices is due to various events around the world. Unfortunately, there’s no clear way to predict whether these prices will rise or fall, as the unpredictable events that happen worldwide will always likely affect fuel prices. However, there have been some ways to help ease the burden of these unwanted rises in costs.

Fuel Allowance  

A fuel allowance is a payment that can help with the cost of heating during winter. You can only get a fuel allowance if you’re getting long-term social welfare payments, and can’t provide for your heating needs from your pocket. 

This is a great option for those struggling to keep up with the rising fuel costs. 

Other Options To Help With Fuel Rising Costs

We’ve touched on how you can save money on rising fuel costs, but to put it briefly, there are also smaller (but very helpful) ways you can help with fuel rising costs. 

For instance, choose bigger stations to fill up your car.Bigger buyers can often strike better deals. You can find bigger stations by finding petrol stations that fill up more often. 

cluster of stations
can also be a signifier that the prices for those areas are cheaper. When several stations are clustered, they are more likely to cut prices to tempt drivers in. 

Will Prices Fall Anytime Soon?

As we mentioned before, it’s unfortunately not that simple. 

We can safely predict that fuel prices will not fall anytime soon. But, events can deter these predictions and surprise us along the way. There are factors that we can consider that can determine whether fuel and gas prices will go down. 

Firstly, whether we can find another country that can supply us with the demand of fuel in Ireland and beyond. 

Secondly, whether we can get Russia to supply us with natural gas and fuel again.

Of course, there are no determining factors on whether these events can happen. We will have to see how events play out in the coming years. While we’re waiting, make sure you stock up on home heating oils to ensure high-quality heat for your home before winter!