3. OIL
players Applegreen and Maxol, take two-thirds of the Irish retail sector. According to the Irish Petroleum Industry Association 25% of filling stations are company owned. The rest are franchised or run by independent operators. Another noteworthy trend is the tendency towards unmanned filling stations.
Topaz proposed an acquisition of Esso Ireland in late 2014. The Competition and Consumer Protection Commission (CCPC) raised concerns over an excessive concentration of the Dublin fuel market and its retail service. Topaz committed to divest 50% of Esso Ireland’s assets in Dublin Port fuel terminal and three retail stations. The CCPC agreed that such measures were sufficient to address competition concerns and approved the proposed acquisition, which allowed expansion of the Topaz network in Ireland.
The Canadian company Irving Oil, the incumbent owner of Whitegate refinery, signed an agreement in August 2018 to acquire an Irish energy marketing and distribution organisation, Tedcastle, which operates under the name Top Oil. The acquisition will allow Irving Oil to expand its business across the Atlantic basin, as the company is not yet present as a retailer in the wholesale market for oil products. CCPC cleared the acquisition in January 2019.
Prices and taxes
There is no direct regulation of oil product prices, but the government sets basic policy frameworks to ensure price competition and consumer protection. Ireland’s domestic oil product prices are determined by various factors including market fundamentals, exchange rate (EUR/USD [United States dollars]) and refining capacity. The levies and taxes applied on petroleum products make up about 60% of the retail price.
The tax receipts associated with motor fuel consumption are an important revenue source for the government. EUR 2.9 billion of excise duties (mineral oil tax), value-added tax and carbon tax on oil, which together consist of the total tax on the fuel, were paid to the Exchequer in 2016 (IGEES, 2017). The revenue from taxes on diesel has recovered from the financial crisis and continues to grow quickly, indicating an increased transport demand overall and a notable fuel switching from gasoline to diesel.
Since their peak in 2012 (diesel: USD 2.03 per litre; gasoline: USD 2.15 per litre), domestic oil product prices have continued to decline, driven by market factors. However, the combined tax and duty receipts from oil remained stable at just under EUR 3 billion per annum. From 2017, oil product prices started to pick up, and in the third quarter of 2018, the price for automotive diesel in Ireland was USD 1.6 per litre, the eleventhhighest among IEA member countries (Figure 3.6).
Taxes accounted for 55% of the total automotive diesel price. The gasoline price was slightly higher than diesel at USD 1.7 per litre, of which 60% was taxes, ranking the twelfth-highest gasoline price in the IEA comparison. Ireland stood relatively low, the seventh lowest, in the IEA ranking for light fuel oil price. The light fuel oil price was USD 0.87 per litre, consisting of 28% tax components.
41
ENERGY SECURITY
IEA. All rights reserved.
3. OIL
Figure 3.6 Oil fuel prices in IEA countries, third quarter 2018
Automotive diesel fuel
2.5 |
USD/L |
Tax component |
|
|
|
2.0 |
|
|
1.5 |
|
|
1.0 |
|
|
0.5 |
|
|
0.0 |
|
|
Premium unleaded gasoline (95 RON)
3.0 |
USD/L |
Tax component |
|
|
|
2.5 |
|
|
2.0 |
|
|
1.5 |
|
|
1.0 |
|
|
0.5 |
|
|
0.0 |
|
|
Light fuel oil
USD/L |
Tax component |
2.5 |
|
2.0 |
|
1.5 |
|
1.0 |
|
0.5 |
|
0.0 |
|
Ireland’s oil prices are close to the median among IEA countries, despite relatively high tax shares.
Notes: Data unavailable for gasoline in Japan, and light fuel oil in Australia, Greece, Hungary, Mexico, New Zealand, Slovak Republic and Sweden. L = litre; RON = research octane number.
Source: IEA (2018c), Energy Prices and Taxes 2018, Quarter 3, www.iea.org/statistics/.
42
IEA. All rights reserved.