Oil prices and the price of oil products have little direct impact on electricity prices in Europe except for in countries, like Malta, which are highly dependent on oil for their electricity production . The most important indirect impact of oil pricing is its influence on the price of natural gas, reinforced by the fact that gas-fired power plants often set the wholesale price within electricity markets.
Factors which could reduce the impact of the international oil price on EU energy prices include increasing LNG markets, increasing US gas production, potential US gas exports, potential European shale gas production, high network charges and taxes on retail energy and increased use of renewable resources. Energy efficiency and renewable energy sources reduce the demand for fossil fuel energies and thus contribute to easing the pressure on fossil fuel prices. On the other hand, increased demand for gas with reduced supply capacity, weakening controls and lower network charges can reinforce the impact of oil prices .
Irelands target under the EU Renewable Energy Directive for the share of its gross final consumption of energy from renewable sources by 2020 is 16%. Within that renewable energy is to make up at least 10% of the final consumption of energy in transport.
To meet this Directive, the Government introduced the Biofuels Obligation Scheme. Currently, suppliers are required to ensure that 6.383% (by volume) of the motor fuel they place on the market in Ireland is produced from renewable sources e.g. ethanol and biodiesel .
There are currently some specification constraints on the quantity of biofuels that suppliers can add to meet the EN 228 standard, petrol can only contain a maximum of 5% ethanol and to meet the EN252 specification, diesel can only contain a maximum of 7% biodiesel. To comply with the EU Directive this blend rate will be increased to 10% by 2020 . Given that our finished products must contain this volume of biofuels, this particular component of the final price of petrol and diesel is not affected by movements of the commodity oil price.