What’s going on with fuel prices and are my energy bills going to rise again?

Fuel prices are back on the agenda are they?

They are indeed. Conflicts in Iran, Ukraine and Yemen have seen oil and natural gas prices on wholesale markets climbing again and that has prompted EU energy ministers to meet on Thursday to discuss energy security and the higher costs faced by consumers as winter approaches.

And I suppose the ministers meeting today are not too upbeat?

They are definitely not upbeat. The EU is ‌entering the winter heating ⁠season with stocks at only 75 per cent of available storage, compared with 83 per cent a year ago. “We are in a ‌very ‌serious ​situation now. It does not look like we have a security of supply issue but I would warn against neglecting ⁠that,” EU energy commissioner Dan ​Jorgensen said. He stressed that ​affordability was just as urgent an issue as supply and said that a plentiful supply of fuel means nothing to households and businesses if they can’t afford to use it.

So what is the EU Commission doing to help?

This week it started talks with European refineries to see if there were ⁠ways to boost output, including ⁠through the possible ​easing of some technical specifications. EU countries are also considering a commission proposal to cut electricity bills through tax and grid-fee reforms, such as by taxing electricity at a lower rate than natural gas.

But prices are climbing?

European wholesale gas prices briefly touched €100/MWh on Wednesday for the ‌first time since December 2022 when Europe was reeling from the loss of most of ​its Russian pipeline gas supply. Prices are now trading at about triple pre-Iran war levels.

And what about electricity closer to home?

The news is not great on that front either. Wholesale electricity prices have almost doubled in the past year, according to data from the Central Statistics Office this week. On a monthly basis, wholesale electricity prices rose almost 7 per cent in September, with energy fuels up almost 11 per cent compared with August. The cost of energy fuels has risen almost 47.6 per cent year on year compared with September 2025.

So does that mean my electricity or gas bill is going to go up?

It is hard to say what the domestic providers will do in the weeks ahead. They all increased their prices by varying amounts as the summer came to an end but there is no guarantee those hikes will be the end of it. It does seem unlikely they will announce any new price increases in the winter months – that would never play well with their customers – but come the spring we could definitely see more hikes.

Are things any better when it comes to motor fuel?

No. According to the FuelWatch app, the average price of a litre of diesel on Thursday morning was €2.14 while a litre of petrol was said to cost an average of €1.99. If we look back at August, figures from the AA suggested that the average price of a litre of petrol was €1.84 and it put the average price of diesel at €1.92, while in September it priced petrol at €1.87 and diesel at €1.94.

So, I am paying about 20 cent more for a litre of diesel and 15 cent more for petrol than I was?

It is actually much worse than that if you widen the lens slightly.

In February, a litre of petrol and diesel were both priced at about €1.70. That means many motorists are now paying as much as 45 cent more for each litre of diesel they pump into their car. If a typical motorist covers about 17,000km a year and uses about 1,100 litres of fuel, the higher prices today – if maintained – will see motorists spending close to €500 more on fuel over the course of a year than they were in 2024. And it is also worth bearing in mind that today’s prices do not take into account the temporary tax cuts that apply to both petrol and diesel. If the tax had not been cut, the price of a litre of diesel would be about €2.50, a price that would have been unimaginable five years ago.

And oil prices are to blame?

The higher price of oil is only partially responsible for the higher prices we are paying at the pumps. The price of a litre of Brent crude, widely considered the benchmark for fuel prices worldwide, is currently about $114. That is higher than the $60 or $70 it cost 12 months ago but less than the $120 a barrel it was priced at in March and April immediately after the war in the Middle East began.

So why are fuel prices so much higher now than they were in the spring?

There has been a reduction in the number of refineries in the Middle East that can convert crude into motor oil, with many of them having been bombed or otherwise damaged. That means that even if there is plenty of crude now, the capacity to turn it into diesel and petrol is not there.

And dare I ask about home-heating oil?

The news on that score is even worse. On Thursday morning the average price of 500 litres of home-heating oil was about €833. In September it was averaging €790 and in early July, admittedly when demand would have been low, 500 litres was averaging €590. In February, just before the war in the Middle East began, the same volume of home-heating oil was priced at about €490.

What does that mean for homes that use heating oil?

Well, about 700,000 homes across Ireland rely on it. A typical Irish three- or four-bedroom house will use between 1,500 and 2,000 litres of home-heating oil in a year, which means the spike in prices is likely to cost many homes well more than €1,000 over the course of a year.