All hands to the pumps!

Motorists are finding the current increases in petrol/diesel prices a big drain on their income. I know to fill up my tank it is now costing well over €53 compared to €40 a year ago. The official statistics confirm this with diesel prices increasing a massive 65% in the last 4 years and petrol prices increasing by almost 40%.

Despite repeated calls from CAI and others to Government to do their bit by reducing either excise or VAT on petrol/diesel they have steadfastly refused to do so. The irony of course in all this is that high petrol/diesel prices are in the interests of Government because the higher the price the greater the amount of VAT revenue generated for the Exchequer.

However given the huge hole fuel costs are burning in all our incomes, it is not enough for Government to sit back and tell us to shop around, they have a duty to assist us in that regard. Therefore there are three things the should be doing (which I am calling Fuelwatch Ireland) to assist motorists with high fuel costs and to drive greater competition at the pumps! As a preface I want to say that I am in favour of measures to car journeys and oil dependency, but that cannot be achieved overnight and we all don't live within walking distance of public transport, so in the meantime something must be done.

It could consist of the following aspects.

A statutory fuel price database where all service stations in the state would be legally required to register their current prices so that consumers could check online where they could get the cheapest prices in their area. Fuelwatch Ireland would be based on the very successful fuelwatch database in Western Australia which is now being expanded across Australia. Legislation would be required to ensure all service stations comply with the scheme.

There are a number of websites already which provide information on petrol and diesel prices and those running these websites must be commended for the assistance and information they provide. However since there is no obligation on the stations to cooperate with these websites and they depend on information being sent in by motorists and in some cases the prices can be out of date. A statutory website would include all stations and would ensure that the information provided was up to date. Like the grocery price surveys, this would assist consumers to shop around and get the best price. It works very well in Australia, I cannot see any reason why it couldn't work here. It would be quick, easy and cheap to do.

I also think we need to investigate the price of fuel at the pump. I would really like to see the Government commission a study to investigate whether fuel prices in Ireland have increased in line with global prices or if price increases have surpassed global oil prices. Also would be useful to examine the extent to which price decreases have been passed onto the consumer at the pump as quickly as price increases appear to be. I have no evidence to indicate that price reductions are not being passed on, but given the significant fluctuations in price in the last year, it is important to make sure that the current volatile market situation is not being exploited further.

And finally I think we could assist motorists to maximize fuel efficiency when using their car which would be good not only for the pocket, but also kinder on the environment. I am not an expert on this, but the Government could develop and distribute practical information to all motorists on the national vehicle register on how they can reduce their fuel costs. All register vehicle owners could be sent a leaflet and this information could also be put online. While this leaflet would outline the options for reducing car use, it would also provide information on how motorists could reduce fuel use even while using their car. It would cover areas such as servicing, speed and driving patterns, tyre type etc where consumers could reduce their fuel use which we don't always think about in relation to reducing costs, well I don't anyhow. This could be easily done with the assistance of motoring experts.

Basically in my humble opinion it's time for the Government to do something to assist motorists given the high cost of fuel. They can't reduce the price of a barrel of oil, but they make a contribution and these proposals would go some way to allievate all our pain at the pumps!


Petrol protests Indonesian style!

Money is too tight to mention

Consumers are really feeling the pinch, the cost of ordinary and essential items such as food, petrol/diesel, electricity and gas have soared in the last 12 months. Inflation has been at or near 5% since December 2006. Like the Trocaire ad about climate change, the surge in the cost of living is affecting everybody but not equally. People on low and fixed incomes are under huge pressure.

That was borne out by the recent initial report on financial capability by the Financial Regulator (FR). They define financial capability "as a broad measure of the knowledge, skills, attitudes and behaviours necessary to manage personal finances and to choose and make appropriate use of financial products"

Now I have been critical of the FR on some issues, but I want to praise them for this piece of work. Even though it is an initial report, it looks like being a very useful report. However it is vital that the findings are used to guide the work of the FR over the coming years.


Simply Red and Simply Sung...Money is too tight to mention!

The key findings of the report are;

• 37% of consumers are having some degree of difficulty keeping up with bills and credit commitments.
• 60% and 66.2% respectively of recently divorced and separated people have some degree of difficulty keeping up with bills and credit commitments.
• 13% have found themselves in financial difficulty (3 or more months behind payments with regular commitments) in the last 5 years.
• 27% of consumers have no idea how to make a complaint to a financial services firm and 26% say they only have some idea of how to complain.
• 25% of respondents or their partners have experienced a large drop of income in the past three years.
• 53% would strongly agree or tend to agree that they would trust the advice of financial advisers and accept what they recommend.
• 63% would strongly agree or tend to agree that they have a clear idea of the what financial products they need without consulting a financial adviser.
• Only 36% understood that the value of a tracker bond would be directly affected by stock market performance.

Interesting stuff, but what does it all mean or what can be done you might ask.

Well its clear that many people are finding it hard to make ends meet. It's important that they know there are excellent services out there that can help such as the Money Advice and Budgeting Service who can assist if people have debts and are struggling to make ends meet. They cannot give you money, but they can help you manage your income better and draw up a reasonable plan to pay off debts. I know some people may find it difficult to accept they have a problem but its a free and in my experience good service.

Perhaps the FR and MABS could link up and run a publicity campaign.

Also people still don't know how to complain or perhaps if they have a valid complaint. Thats a worry. One thing the FR could do is to publicise the consumer protection code and make sure lots of copies are available in all financial institutions. They already have a very good summary, called the little red book which should be circulated widely. Consumers should know that the code says that financial institutions have to act in the best interests of customers.

Despite all the publicity and contoversy over the last decade about wrongdoing and misselling (and even in the last few weeks concerning older people) by financial institutions and advisers, its clear many people (up to 53%) still find dealing with finance and financial institutions challenging and appear to be saying they trust what they tell them. That's disturbing, because recent evidence has suggested that front line staff are under pressure to sell you products which may not always be in the best interests of the consumer. Would you go into a garage and tell the salesman that you want to buy a car and let them decide what is good for you. No you wouldn't and the same should apply to financial products, consumers should always get some advice and/or a second opinion.

There is little Ode to Joy for Irish Consumers!!

Quelle Surprise! Another report tells us that we are being ripped off compared to our EU counterparts. Forfas published a report last week which reminds us again just how much over the odds we are paying for everything. Well that is all very good, but what we need now is an action plan to actually address the underlying reasons why the cost of living is so high here. We need a co-ordinated Government response to inflation, we need to overhaul the consumer redress system, we need to either reform or if necessary replace the underperforming regulators and we need to take on the vested interests and inject more competition into the economy. And of course I would say this....we need to make sure CAI and others coming from a consumer perspective are at the table when key decisions are being made to ensure the voice of consumers is heard.

Also last week Paul Kelly in the Irish Examiner did an excellent piece on inflation for everyday costs, in particular food. Its shows that flour has gone up 52%, butter up 27%, milk up 22%, eggs up 16% to name a few. While the overall inflation rate has come down to 4.3% (still very high) in January 2008 these everyday costs have skyrocketed, which hits vulnerable consumers on low and fixed incomes the hardest.

Well what can the EU do to address our inflation problem? The single internal market was supposed to bring extra choice and competition. I think we have got the choice, but the competition has been slow to arrive. Yes, large International and European multinationals have come into the Irish market, but in most cases (perhaps Bank of Scotland-Ireland concerning mortgages is an exception to the rule) rather than shake up the market, seeing how cosy and easy it was to overcharge, they nestled into the Irish way of doing things. So as is confirmed by the Forfas report, Irish consumers have not seen much of the benefits of a single market.


Ode to Joy for Irish Consumers?

The debate on Europe will dominate the political agenda in the coming weeks and months. On a personal basis I am pro-EU and will vote yes for the Lisbon Treaty. It would be easy to blame Brussels for the failure of the single market to benefit consumers. Thats not to say that the EU couldn't do more and I do worry about the army of business and corporate lobbyists who descend on the EU institutions every day to press the case of vested interests. However as with environmental and social legislation, some of our more progressive consumer legislation has been driven by the EU and the actions on flight rights and mobile roaming have been welcome.

What we need to see is a commitment by our own Government and the regulatory bodies here to ensure the full benefits of the single market are passed onto consumers, and that unfortunately has been mostly lacking to date.

Government inspired inflation coming to a bus and rail station near you!

Well I suppose we are now six days into the New Year, so I should have expected news of Government sanctioned price increases by now. So to prove their efficiency, low and behold along they come, unlike the buses on time every January.

The Sunday Business Post informs us that the Department of Transport (not that there is any mention on their website as of this morning to that effect)has sanctioned fare increases on bus and rail services of up to 10% across the country. This of course is shockingly hypocritical in light of their statements on the need to tackle inflation. On top of these price hikes, many rail commuters are also facing new and increased car parking costs at stations. Recent figures from the CSO showed that more people are driving to work and less travelling on the buses in 2006 compared with 2002 and this price hike will only add to that.

I am reminded of this Fast Show sketch when I think about Government policy on inflaytion!


Public transport costs are one of the key areas where Government has the power to control prices and despite the fact that last June the Government hosted an anti-inflation summit to demonstrate its commitment to keeping pieces and costs down, it has year after year sanctioned increases in public transport fares. But of course, this is all easily explained. The Consumer Strategy Group report in 2005 highlighted the Governments’ conflict of interest, in that it is both the owner and regulator of the CIE group of companies, therefore it has the option of investing more in public transport and keeping costs down or it can pass the increased costs onto the consumer. And of course the latter argument always wins out, that if there is ever any argument of course in the first place.

And speaking of this Anti-Inflation summit when it was convened inflation was 5% and six months on it is still 5%. With the most recent inflation figures from the CSO showing that transport costs were the second largest contributor to inflation after food and drink prices in November 2007, it would have been sensible public policy in relation to reducing inflation, traffic gridlock and CO2 emission to freeze public transport fares. However at the moment, having the Government in charge of tackling inflation is a bit like having Tony Soprano in charge of crime reduction, they may know a lot about it, be responsible for a lot of it and have no interest in but reducing it.


I have to declare an interest, I am a daily Bus Eireann commuter from Ashbourne to Dublin myself. In general the service is good, but the cost is already steep at €5.75 daily return, so another 5-10% on that and I am really beginning to I feel that the Government wants me to go back to my car.

What we need is an independent transport regulator as proposed almost 3 years ago to set prices taking the needs of consumers into account along with increased competition to give consumers greater choice and to keep prices down.