ANYONE WHO DRIVES will have noticed the increased cost of filling up the tank lately.
In recent weeks the cost of petrol has surged to a record high of more than €1.60 per litre with diesel regularly hitting over €1.55. AA Ireland says the price of a litre of petrol has increased by 2.1 per cent so far in the past month alone, making a huge difference to anyone who drives regularly.
Figures show that the jump in prices has been more acute in the past year but has been happening for some time. The average cost of a litre of petrol has risen by just under 10 per cent since March 2011 – and by 56 per cent in the last three years (see figures below).
The high fuel prices aren’t just affecting cars either. On Wednesday, Aer Lingus warned that its fuel bill is going to rise by around €60 million this year if the high oil prices persist, and said that is eating into the airline’s profits.
Conar Faughnan of AA Ireland has criticised the current prices as a ‘rip-off’ – and blamed the government for adding taxes in the most recent Budget:
There is no doubt about the fact that we are being ripped off but the culprits are not the local garages. It is our own government and the policy of super-taxes on fuels.
Fuel prices were hit by a double whammy in December’s Budget between the government-imposed price increase as well as the VAT increase of 2 per cent. The Budget added €0.014 per litre to the price of petrol and €0.016 per litre to the price of diesel.
AA Ireland estimated that altogether the Budget added about €10 to the monthly cost of running an average family car because of the increases in petrol and diesel.
But it isn’t just government policy to blame.
The bigger picture behind the increase in the price in fuel has been the rocketing price of oil. This has partly been down to more demand: countries like Brazil, China and India have hugely increased the amount of oil they use as their economies continue to surge.
But the main reason has been the uncertainty and turmoil in the Middle East. A combination of the Arab Spring uprisings and the increased tensions between the West and Mahmoud Ahmadinejad’s Iran has led to investor fears over disruption to the oil supply, leading to a constant jacking up of the cost every time it looks like it could become more difficult for the West to access oil from the most oil-rich part of the globe.
On Thursday, the price of oil shot up to the highest it had been since July 2008 after an explosion in Saudi Arabia, the world’s biggest oil producer, left investors fearful that the blast could lead to a shortage of the fossil fuel.
There’s little sign of prices hikes slowing down or reversing in the near future either, in large part because of the tensions between Iran and the EU.
Last month Ahmadinejad stopped supplies of oil to the UK and France, and has threatened to extend the boycott to other European countries too. The move was largely pre-emptive: the EU had already said that it is going to stop importing crude oil from Iran from 1 July as part of its sanctions relating to Iran’s controversial nuclear programme.
Either way, prices across Europe have increased as a result. Norway has been particularly badly effected with average petrol prices hitting the equivalent of €1.95 for February, while Greece, Italy and the Netherlands all had average prices of €1.70 or more.
Price tracker website Pumps.ie showed the average price of petrol in Ireland as of Friday afternoon was €1.61. Diesel’s average price per litre was €1.57.
This snapshot of the average price for a litre of petrol over the past 6 years using data from Pumps.ie shows how the price has jumped significantly in the past six years:
AA Ireland have suggested a few guidelines for drivers to help save both fuel and money:
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