The price of home heating oil rocketed by 67.5% between February and March of this year, according to new figures from the Central Statistics Office (CSO), driving a sharp rise in overall inflation and adding pressure on households.
The CSO said the annual rate of inflation reached 3.6% over the 12 months to March, the highest level recorded in more than two years. This marks a notable increase from the 2.7% rate reported for the year to February.
Energy costs were a key factor behind the rise. Diesel prices climbed 18.1% in March, while petrol increased by 7.7% over the same period. Transport costs rose by 5.2% during the month, while housing, water, electricity, gas and other fuels saw a combined increase of 3.9%.
The CSO noted that the surge in home heating oil prices is the largest recorded since 1996. Price increases for petrol and diesel were also among the steepest since mid-2022, when global energy markets were disrupted following the outbreak of the war in Ukraine.
Data collected between March 10 and 18 showed the national average price of diesel reached €2.05 per litre, up 31 cents compared to February. Petrol averaged €1.88 per litre, an increase of 13 cents. These figures were gathered before government excise reductions took effect and before prices reached their peak levels later in the month.
Home heating oil alone contributed 0.52 percentage points to the overall inflation rate in March, making it one of the most significant drivers of rising costs. Diesel and petrol added 0.27 and 0.11 percentage points, respectively.
Economists say the sharp rise in heating oil prices reflects Ireland’s reliance on international energy markets. Professor Lisa Ryan of University College Dublin explained that heating oil is largely derived from kerosene, which is traded globally and closely linked to aviation fuel markets. Ireland imports around 40% of its kerosene supply from the Middle East, leaving it more exposed to global price swings.
By contrast, petrol and diesel are tied more closely to Brent crude, much of which is sourced from the North Sea, making them subject to different market dynamics. Ryan said these are effectively “two different markets,” which helps explain why heating oil prices have risen much more sharply than motor fuels.
Ireland also has a high dependence on heating oil, with an estimated 700,000 homes using it as their main source of heat. While demand is expected to ease during the warmer months, Ryan warned that elevated prices could persist. She suggested that the coming summer offers an opportunity to help households transition to alternative heating systems before winter returns.
The latest figures highlight the continued impact of global energy trends on domestic inflation, with households facing rising costs across essential fuel categories.
