Pump it up | 

Petrol follows diesel in soaring over €2 a litre as unions push for pay hikes

Unions step up demands for pay rises to meet soaring costs

Stock image

Eavan Murray, Senan Molony and Anne-Marie Walsh

Petrol prices have breached the €2-a-litre mark as the Taoiseach warned of a new era of price hikes.

It comes as inflation hits a near 40-year high and unions step up demands for pay rises to meet soaring living costs.

Micheál Martin gave his most stark assessment yet of continuing inflation, after it reached 8.2pc in May.

Prices are going to continue going up this year and the Government has no idea by how much, the Taoiseach said in Brussels yesterday.

“Prices will go up. We don’t have specifics on by how much,” Mr Martin said after an EU summit meeting.

Taoiseach Micheál Martin accepted 'prices will go up', while adding, 'we don’t have specifics on by how much'. Photo: PA

He said we were facing into a different era in terms of pricing around fossil fuels.

In the space of the last 12 months, the price of diesel has jumped by an unprecedented 41pc while the price of petrol rose by 31pc.

Petrol has breached the €2-per-litre ceiling at many filling stations in recent weeks but it stands at a national average of €1.91.9 per litre.

Meanwhile, diesel, which has previously broken beyond the €2 ceiling, has fallen back slightly and now stands at a national average of €1.94.6 per litre.

Fuel prices around the country remain volatile since the Russian invasion of Ukraine. Within days of being introduced in March, the Government’s excise cut of 20c per litre on petrol and 15c on diesel was wiped out.

Anna Cullen, spokesperson for AA Ireland, outlined the extent of the crude oil price rise. “It is now at $120 (€111.75) per barrel. This is the highest price we’ve seen in two months,” she said.

“The jump in prices is mainly after EU leaders reached an agreement late on Monday to ban 90pc of Russian crude by the end of the year.

“For people who rely on their cars, they’re spending around €500 more than they were last year to fill up.”

On pay pressures, the Taoiseach said the Government had begun exploratory talks with the social partners “in respect of the unique set of circumstances that we find ourselves in now because of the war”.

He said he thought it would be “more coherent” for the country to approach the issue in a collective way.

A push to resurrect some form of social partnership, that could set pay for workers across the economy, is under way. The Government and senior union leaders have discussed the possibility of centralised pay bargaining at the Labour Employer Economic Forum.

Ibec chief executive Danny McCoy said there was enormous pay pressure on employers, who also face increased costs due to new entitlements such as statutory sick pay and a pension auto-enrolment scheme. “If there is a social partnership model, it would differ to previous versions, described as modest wage increases, industrial peace and tax cuts,” he said. “On this occasion, it would mean modest wage increases, industrial peace and tax rises.

“You might ask what for? For the Government to put in place what it talked about during Covid, less precarious income continuance – like having an employment wage subsidy scheme in place if there is a demand shock.”

However, he said it would be a hard thing to sell.

Siptu deputy general secretary Gerry McCormack is not in favour of a return to centralised pay bargaining.

“Our strategy is to look for payments up to the level of inflation,” he said. “Our position is we want to maintain our members’ standard of living. However that’s done doesn’t matter, but it has to be the equivalent of 7pc or 8pc.”

He said unions were seeking an increase in the value of tax-free vouchers employers could give to workers, from €500 to €1,000. They are also lodging claims with employers for lump sums and extra holidays in pay deals.

“The Government said it is going to do something about (inflation) in the Budget, but the answer to that is ‘too little, too late’,” he said. “We need to be protecting people’s living standards at the moment. Employers and unions can only do so much in terms of pay rises and half is gone in tax.”

He said the union would support members who entered disputes with employers if pay offers were not good enough.

Today's Headlines

More Irish News

Download the Sunday World app

Now download the free app for all the latest Sunday World News, Crime, Irish Showbiz and Sport. Available on Apple and Android devices

WatchMore Videos