‘We’ll tackle the fuel price gougers’
Tánaiste insists he’s monitoring the situation as watchdog urged to ‘bare its teeth’
TáNAISTE and Enterprise Minister Leo Varadkar last night said he was keeping a close eye on claims of price gouging at the petrol pumps – amid calls for an emergency reduction in VAT on fuel and energy.
Government TDs this weekend called on the Competition and Consumer Protection Commission (CCPC) to get tough on offenders and act as ‘guard dogs’ against rampant inflation.
And Mr Varadkar told the Irish Mail on Sunday that the CPCC ‘is an agency under my remit’ and that the situation ‘is something that’s being monitored’. He said: ‘Just because the price of a barrel of oil goes down doesn’t mean that the price goes down immediately
‘We are aware of the impact on households’
and vice versa, but it’s something that we’re monitoring. I can’t say for certain that the petrol retailers or diesel retailers are getting an increased margin or not. I don’t want to say that unless I know it’s true, but it is something that’s being monitored by the CCPC.’
When asked about additional Government measures to combat soaring fuel costs, Mr Varadkar said: ‘You know, the Government is very aware of the impact that increased energy prices are having on households, particularly those who are struggling to make ends meet. And it’s having an impact as well on the cost of doing business.
‘We’re now working with the European Commission to see if there are more things that we can do. But I need to be honest with people, the price of energy, the price of petrol, diesel, gas, electricity isn’t set by the Government. It’s an international price based on the international cost of energy, the best we can do is ease the burden. We’ve done that already. We’ll be looking at ways we can ease it more.’
The Consumers’ Association of Ireland had earlier called on the CPCC to investigate alleweek gations of price gouging at the pumps as it emerged some garages had hiked petrol and diesel prices up to five times in the space of two days, wiping out the Government’s excise reliefs at a stroke.
It comes as pressure mounts on the Coalition to secure a deal in Europe that would allow it to slash VAT on fuel and energy from 23% to a new emergency rate of 9%.
As hard-pressed
householders and motorists feel the pain of unprecedented price rises and soaring fuel costs, prominent Fianna Fáil TD Barry Cowen told the MoS: ‘The powers of our watchdogs are not effective for gouging during a war.’
And he added: ‘The State needs to take on all the holy cows of costs, including price rises by its own companies and bodies.’ Mr Cowen was speaking amid growing anger over State company Bord Gáis’s announcement this
to hike electricity prices by 27% and gas by 39% from April 15. There has been disquiet within the Coalition over the massive €629m profits announced by the ESB recently at a time when consumers are struggling to pay soaring utility bills.
Anger is also mounting at the failure of forecourts to drop fuel prices in response to falling crude prices, despite quickly hiking prices when oil costs rose last week.
The MoS has learned prices were increased by as many as five times over two days in the lead-up to the Government’s move to cut excise levels which shaved 20 cent off the price of a litre of petrol, and 15 cent off a litre of diesel.
According to the CAI, some garages in Dublin increased their fuel prices per litre from €1.79, to €1.85, then onto €1.89, €2.04 and finally up to €2.09, in the two days before the reliefs came into effect.
CAI policy advisor Dermot Jewell said garage owners did this to ensure their profit margins were not hit by the Government’s excise cuts. Mr Jewell told the MoS: ‘We heard that this happened in Dublin. Why did they do that? Why did they do it with such speed and what was the goal behind it?
‘It would appear that it was to protect their profit margins. It happened so rapidly it made no logical sense to the consumer. It gave the impression the price increases were [brought in] so that when the Government reduction took off prices would still be maintained at a high profit-making level, and that’s the area that needs to be addressed. If that’s not the case, let it be explained. If it is, then that’s price gouging and that’s where the calamity is.’
‘Price hikes have given rise to bad feeling’
Mr Jewell added: ‘When the price of crude oil goes down it seems we have to wait for the price to drop in nothing resembling the time period or the time frame in which fuel prices increased.
‘In other words, fuel prices can
increase dramatically in two days but they cannot reduce dramatically in two days, so we need to find out why specifically that is the case.
‘The manner and means through which the prices increased, not necessarily at all garages and at all petrol stations but certainly at some of them, has given rise to bad feeling and a lot of concerns as how can anybody do that and get away with it?’
Mr Jewell said ‘action should be taken’ to clamp down on price gouging. He added: ‘The CCPC are the ones who have the power to do that. They have the powers of investigation to do it. They can demand answers. They can demand documentation.’
Several Government TDs yesterday called on Coalition leaders to empower and challenge the consumer watchdog to police fuel hikes and investigate profits made by semistate energy companies.
Criticising what he described as the ESB’s ‘obscenely high profits’, Barry Cowen said: ‘State companies should not be contributing to inflation or there is little point owning them.’
Mr Cowen called on Taoiseach Micheál Martin and Tánaiste and Enterprise Minister Leo Varadkar to use their powers to beef up the capacity of the CCPC, adding: ‘The State has the mechanisms to help keep a lid on inflation, but they need to be moved from reactive to pro-active.’
His concerns were shared by his Fine Gael Coalition colleagues with one TD warning: ‘There appears to be too much cosiness around at the moment between semi-states and regulators. Where is the appropriate adversarial relationship?’
Carlow-Kilkenny TD John Paul Phelan told the MoS: ‘Increasingly, people are asking what do they [CCPC] actually do? What were they doing when every petrol station jacked up the cost of petrol?’
Mayo TD and former minister Michael Ring also expressed concern about effectiveness of energy regulators, adding: ‘We have the highestpaid regulators in Europe and the poorest outcomes.’
‘Pressure is mounting to slash VAT rate’
Sinn Féin transport spokesman Darren O’Rourke also called for ‘an increase in the efforts of the Competition and Consumer Protection Commission’, saying: ‘Their response has been, at best, passive to date.’
But the war in Ukraine continues to send economic shock waves across the globe, the Tánaiste this weekend warned spiralling energy costs ‘look like they will be with us for a few months at least’.
In a stark analysis of the impact of soaring fuel prices, Mr Varadkar told the MoS: ‘Aside from people struggling with the bills, it’s already having a negative impact on consumer confidence as people rein in spending for fear of things getting even worse. Businesses are facing a double whammy of reduced sales and higher costs.’ Mr Varadkar said the Government is currently ‘exploring all options with the European Union to ease the pain’, adding they expect proposals from the European Commission ‘in a few weeks’ time’.
Pressure is mounting on the Government to secure a deal in Europe that would allow it to slash VAT on fuel and energy similar to how former finance minister Michael Noonan cut the tax rate for the hospitality sector to 9%.
Minister of State for Skills and Further Education Niall Collins told the MoS: ‘The Government is serious in its intentions to reduce VAT. It is complex but with goodwill, a solution will be found shortly.’
The Taoiseach had planned to raise the issue of reducing VAT rates at a meeting of EU leaders this week, but will not able to attend the summit after he contracted Covid-19.