Q&A: What do latest Russian oil and gas sanctions mean for Irish consumers?
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Taoiseach Micheál Martin has warned that Irish consumers are facing "rocky territory ahead" on foot of fresh EU sanctions on Russian oil and gas.
The sixth round of sanctions, signed off on Monday night, will likely push up the price of energy, as almost all Russian oil and gas has been banned from the EU.
But just what exactly does this mean for consumers here in Ireland?
A: After nearly a month of wrangling, the EU has agreed to a partial ban on Russian oil, with the aim of cutting off funding to the Kremlin’s war machine. According to the European Council president, Charles Michel, three-quarters of Russian oil imports will be immediately affected, rising to 90% by the end of the year.
A: He described the move to approve sanctions as a “watershed moment” and while Ireland is backing the sanctions and has done so from the start, Mr Martin said we are looking at a different era now in the price of fossil fuels.
A: Finance Minister Paschal Donohoe said he is acutely aware of the pressures such high increases will place on families, saying measures totaling €2bn have already been brought forward. But it is clear that motorists and businesses will see higher prices at the pumps, as the embargo feeds into higher oil prices.
As a result, the government will find it even harder to manage the already soaring cost of living.
After the announcement of the EU oil embargo, the price of a barrel of Brent crude hit $124.10, (€115.92) its highest level since March, although it dropped back a little in later trading. Oil prices have already risen more than 55% this year and are at their highest levels since 2008.
A: Yes, the cost of fuel is continuing to increase with the average annual spend on petrol and diesel jumping by around €500 compared to 2020 prices.
Figures from AA Ireland show petrol is now 26.5% more expensive than it was in 2021, while the cost of diesel has risen by 37.5% in the same period. Annually, this translated to an extra €486 in the cost of petrol and €530 for diesel.
A: Irish inflation climbed to over 8.2% in May and consumer prices across the eurozone rose by a record, reigniting the debate about whether the European Central Bank will be forced to hike interest rates this summer more aggressively than it apparently wants.
Consumer prices across the eurozone climbed to 8.1%, up from 7.4% in April, as energy and food costs due to the war in Ukraine contributed most to driving prices higher, according to the so-called flash or early estimate by Eurostat.
A: That is not clear. Ursula von der Leyen, the European Commission president who has been driving sanctions policy, promised the EU would discuss how to close the loophole “as soon as possible”. Hungary is seeking EU cash to retool its oil refineries that can only take Russian crude. Croatia also needs time to boost supplies to its northern neighbour through the Adria pipeline. EU leaders have avoided giving details on the end date of the exemption for central Europe.
Before the EU had even agreed on the oil embargo, some countries were already considering further sanctions against Russia’s biggest export: gas. Before the war, Russia supplied 40% of EU gas but EU leaders have promised to gradually phase this out. However, Ukraine’s most outspoken allies in the EU, Poland and the Baltic states, think the EU should now put an end date on Russian gas. That step is far from assured and will be even harder than talks on the unfinished oil embargo.