# When can we expect to see the price at the pumps fall?



## The_Banker (18 Dec 2014)

Now that the price of oil has dropped to around $60 a barrel when can we expect to see the ESB or Bord Gais lower the prices to consumers?

When oil prices were heading towards $160 a barrel there seemed to be price rises every few months to keep the companies "in line with the global price of oil"...

Im sure there will be an announcement from either ESB or Bord Gais very soon


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## Delboy (18 Dec 2014)

There was an announcement recently and some action...the PSO levy went up by 47% or something like that, and around 80% for business customers.
And 1 of the reasons was the fall in oil/gas prices.

Heads I win, tails you lose


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## Sunny (18 Dec 2014)

Wait till you see. All we will hear now is that oil is bought months in advance and that's why we aren't seeing the falls reflected in prices.......


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## Ceist Beag (18 Dec 2014)

Add in the falling value of the dollar versus the Euro and we should see even greater savings soon shouldn't we?...


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## Leo (18 Dec 2014)

Ah, neither of those are big oil users! Natural gas on the other hand...that's a different story. Electricity here is ~45% derived from gas. Gas prices for delivery next month have risen above the levels they were at earlier in the year. Coal demand, and with it price, has jumped significantly as well it seams, and we're still generating 20% of our electricity from that source. Coal at the volumes the generators consume is often bought year ahead. Similar with gas, it's not like they can decide what rate they pay on a day by day basis.

With the need to meet CO2 targets, the renewables component (currently 30% of generation) is rising, and these sources are currently more expensive than gas, coal, etc,. and aren't getting any cheaper. It's projected meeting these targets could add €200M annually to the cost of electricity on top of a €1-2 billion capital program (according to the Irish Academy of Engineering).

On top of that, if the opposition to proposed pylon infrastructure succeeds, you can expect corresponding hikes in electricity prices to cover increased costs of the underground option.


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## Purple (18 Dec 2014)

Wages account for over 50% of the ESB's costs so oil/gas/coal prices are not as significant as some think.
Once Russia is broke the price will go back up again.


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## T McGibney (18 Dec 2014)

Purple said:


> Wages account for over 50% of the ESB's costs so oil/gas/coal prices are not as significant as some think.



Not so.
2012 Annual Report [broken link removed]

ESB "total employee related costs" €626m (itself a staggering amount) out of total cost base of €3,066m.


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## T McGibney (18 Dec 2014)

Purple said:


> Wages account for over 50% of the ESB's costs so oil/gas/coal prices are not as significant as some think.




2012 Annual Report [broken link removed]

ESB "total employee related costs" €626m (itself a staggering amount) out of total cost base of €3,066m, but almost equal to "fuel costs" of €810m.


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## flowerman (18 Dec 2014)

The_Banker said:


> Now that the price of oil has dropped to around $60 a barrel *when can we expect to see the ESB or Bord Gais lower the prices to consumers?*
> 
> When oil prices were heading towards $160 a barrel there seemed to be price rises every few months to keep the companies "in line with the global price of oil"...
> 
> Im sure there will be an announcement from either ESB or Bord Gais very soon


 When hell freezes over??

The CER will probably ramp up prices in the next few months.

Sure they never say no to BG or Electric Ireland.


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## Purple (19 Dec 2014)

T McGibney said:


> 2012 Annual Report [broken link removed]
> 
> ESB "total employee related costs" €626m (itself a staggering amount) out of total cost base of €3,066m, but almost equal to "fuel costs" of €810m.


How much of that is current costs and how much are capital costs?
I find it strange that wages and fuel combined could account for less than half of their running costs.


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## T McGibney (19 Dec 2014)

Its all on their P&L, so it's all current cost. I find it strange too. A large % of the total comprises depreciation. I don't know either whether, or to what extent, fuel costs includes eg peat extraction. 

Sadly, the annual report including the accounts are in a format that doesn't facilitate copy 'n paste or specific links.


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## callybags (19 Dec 2014)

Ceist Beag said:


> Add in the falling value of the dollar versus the Euro and we should see even greater savings soon shouldn't we?...


 
The Dollar has been consistently strengthening against the Euro over the last 12 months.

http://www.xe.com/currencycharts/?from=EUR&to=USD&view=1Y


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## Ceist Beag (19 Dec 2014)

Doh, sorry, my bad!


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## MrEarl (19 Dec 2014)

Whether we speak about the price of Gas & Electricity heating, or fuel at the pumps ... it's always the same old story and will continue to be, until we start taking some action !

For all the effort that people have gone to over the water charges (that are going to be approx €260 pa (I think ?) for the next few years, we've done nothing far greater issues that have hit us financially...

- cost of power / fuel
- government dipping into peoples personal pension funds at will
etc.

It really is time we got out act together as a nation and attended to the priorities...


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## Gerry Canning (19 Dec 2014)

Agreed Mr Earl .

The Water charges was evident to everyone.
The (dipping) into pension funds only hit some .

While we remain tied to outside fuel sources I think a bigger issue is to get our own gas/oil.

In that vein, let us Frack Leitrim ! or is it Cavan?


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## Ceist Beag (19 Dec 2014)

Frack em all Gerry, frack em all .... I'll get my coat!


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## Purple (19 Dec 2014)

ceist beag said:


> frack em all gerry, frack em all .... I'll get my coat! :d


  nice


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## staff (19 Dec 2014)

Most of the cost of fuel in this country is down to tax - about 80% of it apparently and most of that is fixed.  So even if we were to see a cut in fuel costs it would be marginal...


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## Leo (19 Dec 2014)

staff said:


> Most of the cost of fuel in this country is down to tax - about 80% of it apparently and most of that is fixed.  So even if we were to see a cut in fuel costs it would be marginal...



Current excise on petrol is 58.771c / litre. On top of that there's the 2c National Oil Reserves Agency levy, and then VAT, bringing the total to 74.748c per litre. That portion is fixed regardless of oil prices.


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## mcaul (4 Jan 2015)

Ah Fuel prices - everyone gets ina  tizzy, bu very few understand the make up.

Just 30c of the pump price or any other price of fuel represents the raw oil price.

Yes, the dollar price has dropped from $108 to $57, but the euro has weakened from $1.39 to $1.20!

All other costs aside from the raw oil cost (and vat pertaining to it) stay relatively stable. Only exception is refinign costs which increas fro petrol in summer and increase for diesel in winter - this is because both of demand and also that only a certain percentage of oil can be easily refined into specific fuels. When demand increases (gasoil in winter, petrol in summer) the excess demand has to be "manufactured" which is quite costly.

For example, current refinery costs for a litre of petrol is about 6.5c, for diesel it is 13c. Back in October, petrol refinery cost was 7c and diesel was 9c - hence you see the price difference between petrol and diesel being smaller. (there's 10c+vat duty difference in Ireland between petrol & diesel) 

If anyne wants to be a fuel retailer - make sure your coffee is good. A €2 cup of coffee provides more profit than a 30litre fill of fuel!


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## MrEarl (4 Jan 2015)

As an aside from the main topic here,

can we not also expect to see the retail price of electricity and gas dropping ?


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## Leo (5 Jan 2015)

MrEarl said:


> As an aside from the main topic here,
> 
> can we not also expect to see the retail price of electricity and gas dropping ?



That was actually the first question asked in this thread. See my earlier post in response. If anything, expect prices to rise.


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## trojan (5 Jan 2015)

Saw a garage in cork with petrol at 129.9


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