{"id":646166,"date":"2026-10-06T05:52:08","date_gmt":"2026-10-06T05:52:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/646166\/"},"modified":"2026-10-06T05:52:08","modified_gmt":"2026-10-06T05:52:08","slug":"us-ban-on-diesel-exports-would-hit-ireland-harder-and-could-lead-to-rationing-rsm-warns-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/646166\/","title":{"rendered":"US ban on diesel exports would hit Ireland harder and could lead to rationing, RSM warns \u2013 The Irish Times"},"content":{"rendered":"

A US<\/a> ban on diesel exports would significantly exacerbate the current inflation surge, possibly resulting in fuel rationing, with Ireland being hit harder than other countries, Tom Pugh, chief economist with UK<\/a> consulting firm RSM<\/a>, has warned.<\/p>\n

He also predicted inflation was likely to keep edging up as utility bills reset higher in October and indirect energy effects add to airfares, manufactured goods and food inflation. <\/p>\n

This will result in inflation peaking at 4.5 per cent in the new year, Pugh said.<\/p>\n

US president Donald Trump<\/a> has indicated his support for a possible ban on diesel exports to reduce the price of the fuel in advance of midterm elections.<\/p>\n

Under pressure from Trump, the G7 nations last week agreed they would release 100 million barrels<\/a> of emergency oil and diesel stocks, but experts say such a move will only act as a temporary buffer.<\/p>\n

\u201cIreland is uniquely vulnerable because of its reliance on home heating oil,\u201d he said. Home heating oil prices tend to rise alongside diesel prices as both are crude oil distillates.<\/p>\n

About a third of households here (more than 700,000) use home heating oil as their primary source of heating, and the price of a standard household tank has already jumped by almost 60 per cent since the start of the Iran<\/a> crisis in February.<\/p>\n

Pugh said Ireland\u2019s strong economy and labour market put it in a good position to weather the current period of high energy prices.<\/p>\n

The main risk to the outlook would be if the current energy shock \u201cturned much worse\u201d because of an extremely cold winter or because of a ban on US diesel exports.<\/p>\n

[\u00a0Oil refiners US and China have the leverage amid rising fuel pricesOpens in new window<\/a>\u00a0]<\/p>\n

According to Reuters, Trump has warned France and Germany to release diesel stocks or face a potential US exports ban.<\/p>\n

\u201cIt depends on how high diesel prices go, but I suspect if this did happen you would probably be quite quickly into rationing,\u201d Pugh said.<\/p>\n

Since the ban on Russian energy, Europe relies on the US for between a third and a half of its diesel imports.<\/p>\n

The average price of diesel across Europe hit a record high of \u20ac2.24 per litre last week, compared with \u20ac1.59 before the Iran crisis, according to the European Commission.<\/p>\n

Pugh did not discount the possibility that Trump might announce a ban but later backtrack.<\/p>\n

He warned that the current spike in energy prices would eventually translate into higher food prices.<\/p>\n

\u201cIt\u2019s inevitable that we\u2019re going to see another round of food price inflation early next year given all of your input costs have gone up by 50 per cent,\u201d he said.<\/p>\n

\u201cI don\u2019t want to be alarmist … I don\u2019t think we\u2019re going back to the kind of 10-12 per cent inflation that we had in 2022 but considering in February we were talking about inflation around the 2 per cent mark and now we\u2019re talking about 4.5 per cent,\u201d he said. <\/p>\n

He predicted inflation was on course to peak at 4.5 per cent in the new year, \u201cwith the risks skewed to an even bigger rise unless the Government announces further cost-of-living measures in Budget 2027<\/a>\u201d.<\/p>\n

On the wider economy, Pugh said Ireland was insulated more than its peers because of the huge level of corporate tax flowing into the exchequer.<\/p>\n

\u201cWhen I speak to my friends in the UK treasury [about Ireland] the world\u2019s tiniest violin comes out,\u201d he joked.<\/p>\n

While the concentration risk of having so much tax flowing from a handful of companies was real, Ireland was still \u201cstarting from a much better place than other economies\u201d, Pugh said. <\/p>\n

[\u00a0Tomorrow\u2019s budget may be the worst since Charles Haughey\u2019s wild spendingOpens in new window<\/a>\u00a0]<\/p>\n

On the budget, he said: \u201cWhen I look at the Irish economy I don\u2019t see an economy that is crying out for a big injection of fiscal stimulus.<\/p>\n

\u201cYou\u2019ve already got domestically-generated inflation creeping up … the labour market looks close to full employment, you\u2019ve got an economy that is doing very well and is bumping up against those real constraints of infrastructure and labour supply,\u201d he said.<\/p>\n

\u201cIf you inject a dose of fiscal stimulus into that, all you get is inflation.\u201d <\/p>\n

The Government\u2019s proposed \u20ac8.5 billion budgetary package for next year represents a near 6 per cent jump in spending, which economists warn is not sustainable.<\/p>\n

A lot of Government spending is going into inflation-adjusted budgets, he said.<\/p>\n

\u201cIt doesn\u2019t feel to me that you\u2019re solving the problem; it feels like you\u2019re just papering over because you have the budget to do it,\u201d he said.<\/p>\n

\u201cThe risk is, you get into an escalation where, say, inflation is going to be 3.5-4 per cent next year … so if you want to do above-inflation pay rises for the public sector then you need another 7-8 per cent, and you get into this circle rather than addressing the underlying issues of infrastructure,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"A US ban on diesel exports would significantly exacerbate the current inflation surge, possibly resulting in fuel rationing,…\n","protected":false},"author":2,"featured_media":646167,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[969,61,11829,60,43,61533,115,90],"class_list":["post-646166","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ireland","tag-donald-trump","tag-ie","tag-iran","tag-ireland","tag-news","tag-rsm","tag-united-states","tag-us"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/646166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=646166"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/646166\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/646167"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=646166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=646166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=646166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}